Do you know the current lifetime value of your patients? If you’re like most, the answer is no. It can be a difficult metric to capture because it’s dependent on numerous data points, including patient payments, payer reimbursements, and much more. 1 Is it necessary to know the lifetime value of your patients to be a successful practice? Maybe not, but there is one aspect of lifetime value that you do need to understand, and that’s the impact of the patient experience on your bottom line.
Simply put, optimal patient lifetime value requires the highest level of patient loyalty, and patient loyalty requires an exceptional patient experience.
Consumers are in control
The vast adoption of high-deductible health plans means consumers are now responsible for more of their own healthcare costs. As such, they’re demanding the same level of service from their healthcare providers as they receive in other areas of their lives. After all, healthcare is a service, just as is banking and car repair—albeit with significantly higher stakes.
Also like other services, when consumers don’t receive the level of service they expect, they’re more than willing to go elsewhere.2 When that happens, they usually tell their friends and family and are likely to share their experiences online in the form of negative reviews. And those negative reviews have consequences; 80% of people who read negative reviews about a company will choose to go elsewhere. 3
Beyond the exam room
The patient experience includes more than just the clinical experience. In reality, the patient experience encompasses from scheduling an appointment to paying the bill and everything in between. Of course, if a patient receives poor care or a negative outcome, even the best of the rest can’t make up the difference.
While most providers are aware of the importance of providing a positive care experience when the patient is in the office, they may be unaware of just how important the patient financial experience is on overall patient satisfaction. In fact, even a single negative patient financial encounter can completely negate a positive clinical encounter.
Following are four proven techniques providers can employ to ensure a positive patient financial experience to help drive loyalty and patient lifetime value.
Offer patient-centric payment plans
A poll conducted by Debt.com in September of 2021 found that half of all Americans carry medical debt.4 Of those, 46% have medical bills in collections, 43% of which totaled less than $1,000. What if those patients had been offered a payment plan instead of turning them over to collections? For one thing, providers would have started getting paid right away instead of paying a collections vendor to collect pennies on the dollar.
For patients, however, the implications go beyond just the debt aspect. More than 50% of U.S. adults say they have skipped getting the care they need5 and 30% say they haven’t taken their medicine as prescribed—all due to costs.6 This is where the clinical and the financial experience clearly overlap. When patients put off care or don’t follow their care plan, they’re likely to experience negative outcomes.
The best way to mitigate this issue is to make it easier for patients to pay. Offering flexible payment plans before or at the time of service can remove the barrier of cost so patients can better afford the care they need when they need it. The best plans are those that allow patients to add future healthcare costs to the payment plan, and to add those of family members as well. Having a single payment each month is much more manageable than trying to keep track of multiple bills for multiple people.
When patients know a provider will allow them to pay over time via a payment plant, it can strengthen patient loyalty and the patient-provider relationship.
Provide payment estimates
It’s hard to imagine any other industry besides healthcare where individuals don’t know what they will owe for a service until after the service is completed. Understanding co-pays and deductibles can be challenging. Offering patients an estimate of their total financial responsibility prior to or at the time of the service allows them to make more informed decisions about their care.
Providing patient estimates also gives providers the opportunity to educate patients about their coverage. This helps patients see their providers as advocates, not adversaries just looking to collect payment.
Coordinate patient counseling and assistance
Each patient has a unique financial situation—a situation that typically fluctuates over the course of a lifetime. We saw this en masse during the height of the COVID pandemic as businesses shuttered and so many people lost their jobs. Many times, patients don’t realize assistance is available to them.
Providers can help by proactively identifying a patient’s ability to pay and then finding the appropriate level of assistance. But it shouldn’t stop there as navigating the system can be challenging. Providers should also offer to help patients through the application process. This simple act can help increase a patient’s trust in the provider, which can improve loyalty and the patient experience. It also helps a provider’s bottom line by eliminating the expensive process of sending statement after statement to a patient who genuinely cannot afford to pay.
Provide digital tools
Patients are now the third largest payer behind Medicare and Medicaid, accounting for approximately 35% of a typical provider’s revenue stream.7 It’s more important than ever to make it convenient for patients to pay their bills—when, where, and how it’s best for them. Increasingly, this means digital payment tools.
Consumers overwhelmingly want the ability to manage their healthcare payment online or through a mobile app, just as they do their other expenses like mortgages, car loans, and retail purchases.8 Online portals are a great option because they can be accessed at any time from any mobile device connected to the internet. Portals typically allow users to choose their payment preference and to keep their credit or debit card on file, which makes future payments easier. They can also set up recurring payments so they don’t have to bother manually submitting a payment each month.
Another digital option that patients appreciate is mobile payment apps. These apps make it quick and easy for patients to submit a payment, often with a single click. This is much easier than having to fill out a check, put it in an envelope, purchase postage, and take it to the post office.
A new mindset for a new reality
In a time when payer reimbursements are drastically declining and the cost of operating a practice are skyrocketing, providers need to look at their bottom line with a new perspective—one that evolves around the patient experience. It’s important to remember that revenue is not just transaction based; it includes many less tangible elements. By improving the patient financial experience, providers are investing in building the lifetime value of their patients. It’s a win-win for the provider and patient alike.