Back in 2011, Medicare implemented a new program that linked the patient experience with the level of reimbursements hospitals could receive. Basically, if health systems do not follow the patient experience guidelines, Medicare cuts 1 percent of its payments to hospitals and gives that money to medical centers that have better than average patient experience metrics, according to Kaiser Health News. Medicare’s focus on tying patient satisfaction to reimbursement payments was just the beginning. Recent studies show that patient payments and the billing process are directly linked to how happy patients are with their care.
In an interview with the Healthcare Financial Management Association (HFMA), Jason Wolf, executive director of The Beryl Institute and a co-author of the organization’s white? paper on the financial impact of the patient experience, talked about how patient perceptions are going to be a force to be reckoned with within the medical community.
“We define patient experience as the sum of all interactions, shaped by an organization’s culture, that influence patient perceptions across the continuum of care,” Wolf said. “I don’t think anyone would argue that engaging your customers in a way that increases their satisfaction tends to lead to higher engagement and ultimately profitability.”
The idea of connecting the patient experience with the financial health of the hospital isn’t new. Now, in the new consumer health care environment, it is rapidly changing the hospital payments environment. Medicare’s step was the start of a movement toward establishing an inherent link between quality of care and payment. In a way, this transition has set hospitals up for the inevitable migration to value-based care – where having a negative patient experience, and subsequently low patient satisfaction, is tied to how often patients pay their medical bills.
How can patient satisfaction impact the hospital’s financial security?
Hospitals have traditionally had issues with receiving adequate patient collections. So, how can creating a better patient experience boost patient payments? Perception of care quality can directly impact patient choice, and, ultimately, their engagement with paying off their medical bills. In fact, Toby Cosgrove, CEO and president at Cleveland Clinic, recently wrote in an article posted on LinkedIn about when he visited a patient and his or her family in the hospital, only to find out they were unhappy. According to Cosgrove, when patients are disappointed with their experience with a hospital, they are more likely to choose another provider, rate the hospital lower (which then affects Medicare reimbursements), tell their friends about their dissatisfaction and even put off paying the health system back for the service.
Much has been talked about regarding Medicare payments and the patient experience. Hospitals are now finding a similar correlation between patients paying their responsibility and their satisfaction with the hospital. In The Beryl Institute’s study, “Return of Service: The Financial Impact of Patient Experience,” the organization found the financial link between payments patient satisfaction has often been neglected by patient experience champions, who mostly focus on patient outcomes than on the impact a great patient experience may have on the health system. According to Wolf, the author of the study, improvements to the patient experience will boost patient payments, and “could have the most significant impact in making the case for the important work being done.”
Making improvements to the patient experience, combined with adopting clear patient billing processes, are enough for hospitals to notice significant patient collection changes. Satisfied patients who understand what they owe are more prepared and willing to pay off their medical bills, helping hospital to improve patient collections and their overall ratings at the same time. What could be better than a win-win scenario?