Deliver a First-Class Patient Experience with Five Financial Tactics

Deliver a First-Class
Patient Experience with
Five Financial Tactics
Marlowe Dazley
Senior VP and Managing Director of
Financial Advisory Services

© 2021 Health Catalyst
Proprietary. Feel free to share but we would appreciate a Health Catalyst citation.
Deliver a First-Class Patient Experience
with Five Financial Tactics
According to CMS, the largest payer in
the United States, patient experience is
a strong indicator of healthcare value
and therefore a criteria for financial
reimbursement.
While many interactions impact a
patient’s experience, one of the most
significant factors for patients is the
billing and collections process.

With patients shouldering more of the
financial burden due to the prevalence of
high-deductible insurance plans, people want
to know their expected costs before they
commit to a medical procedure so they can
prepare or shop around for the best price.

However, because many health systems
struggle to understand upfront medical
costs, they can’t provide an accurate
expense picture for the patient before or
soon after a procedure.
Complex costing systems that involve
the health system and the patient’s
insurance lead to unclear costs and
unexpected financial statements long
after a procedure is done, resulting in
a less-than-ideal patient experience.

With optimal billing and collections processes,
organizations can inform patients about costs
up front, enhance the patient journey, and
maximize reimbursements associated with
high-value care.

Five Cost Mechanisms Provide a
Peak Patient Experience
As health systems continually pursue new ways
to improve the patient experience, they should
have five elements in place that ensure patients
understand their financial expectations early in
the process and before a procedure:
1. A Defensible Pricing Strategy
2. A Charge Description Master Management System
3. Real-Time Eligibility Verification
4. Patient Cost Estimator Tool
5. Propensity to Pay

#1: A Defensible Pricing Strategy
A defensible pricing strategy (DPS) is the
pricing explanation for a health system’s
procedure and service prices.
Activity-based costing software, such
as the Health Catalyst PowerCosting™
application, allows organizations to
establish DPS by helping them
understand their exact costs for
care delivery.

#1: A Defensible Pricing Strategy
When health systems proactively provide a
breakdown of procedural costs and
increase transparency into historically
opaque healthcare expenses, patients are
more aware of the value and financial
expectations associated with the procedure
cost and can make more informed
decisions about their care.

#2: A Charge Description Master Management System
A charge description master (CDM) is a
comprehensive list of services, supplies,
and drugs that the health system will bill to
a patient or a patient’s insurance company.
Organizations can invest in technology
such as VitalCDM® to ensure their CDM
stays up to date, is compliant, and reflects
updated codes.

The CDM ensures the health system accurately
documents and codes charges, which in turn
charges the patient or the patient’s insurance
provider the correct amount.
Alternatively, if health systems have an
outdated CDM, they might charge for the
incorrect procedure or use the incorrect code,
which could result in an inaccurate patient bill.

To provide the best patient experience, health
systems can use their up-to-date CDM to
charge the patient the right amount the first
time, avoiding confusion or under- or over-
paying for the procedure.

#3: Real-Time Eligibility Verification
Often, health systems verify a patient’s eligibility for a
procedure once it’s performed.
The problem with this reactive process is
that if the patient’s insurance company
doesn’t cover the procedure, the patient
must pay out of pocket and might not
be financially prepared to do so.

To avoid springing surprise bills on patients
after a procedure is done, organizations can
use a real-time eligibility verification tool.
This resource provides an instant review
a patient’s healthcare plan, allowing the
health system to contact a patient’s
insurance company to verify if a specific
procedure is covered.

If the health system learns that the procedure is not
covered and it’s not urgent, the organization can
inform the patient, who can then shop around for
the best rate, value, outcome, or explore other
methods of payment.
A proactive approach to eligibility allows
patients to understand and prepare
for their financial responsibility,
avoiding surprise billing after a
procedure.

#4: Patient Cost Estimator Tool
Once health systems verify a patient’s
eligibility, they can give the patient an
accurate estimate of cost.
An online patient cost estimator tool
considers how much a patient has
paid against their deductible to
calculate the exact out-of-pocket
patient cost for the procedure.

For example, if a patient’s deductible
is $1,000, the patient cost estimator
will provide the cost of the procedure
(e.g., $300) and the amount the
patient has already paid that year to
date (e.g., $500).
This way the patient knows how
much she will have to pay out of
pocket (e.g., $200).

Increased specificity and context around a
patient’s costs provide a premiere patient
experience because health systems can
inform patients of their total procedure cost
versus their actual out-of-pocket cost
based on their deductible.

#5: Propensity to Pay
Leveraging augmented intelligence-
powered tools and expert guidance, such
as Healthcare.AI™ by Health Catalyst
and its data science experts, health
systems can build predictive models that
scour a patient’s payment history to
predict the likelihood that a patient will
pay (a patient’s propensity to pay).
This allows healthcare providers to
identify patients who are less likely to
pay and offer them financial resources.

For example, if a patient has a low
propensity to pay, a member of the
registration department could offer the
patient a loan program, payment plan,
or even a charity discount.
Planning ahead helps avoid a poor
patient experience, such as sending
a patient to a collections company to
make further attempts to collect
outstanding balances.

Such poor financial records can also
impact a patient’s credit, making future
purchases more difficult and ultimately
erodes the patient’s healthcare
experience.
Using a propensity to pay tool up front
can avoid these negative financial
consequences and set patients up for
financial success right from the start.

Optimize the Patient Experience with
Effective Billing Processes
Billing and collections procedures can play a
key role in a patient’s journey—from outlining
financial expectations before a procedure to
ensuring a patient has a realistic payment plan.
Inversely, poor billing and collections processes,
including surprise bills or inaccurate charges,
can overshadow even the best care outcomes.
To provide a best-in-class patient experience,
organizations can implement the five
mechanisms listed above and meet patients’
rigorous expectations around cost, billing, and
price transparency.

Optimize the Patient Experience with
Effective Billing Processes
To provide a best-in-class patient experience,
organizations can implement the five
mechanisms listed above and meet patients’
rigorous expectations around cost, billing,
and price transparency.

For more information:
“This book is a fantastic piece of work”
– Robert Lindeman MD, FAAP, Chief Physician Quality Officer

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Senior Vice President and Managing Director at Health Catalyst, responsible for financial
advisory services providing strategic financial management expertise and consulting for
healthcare payers and providers. Prior to joining Health Catalyst, Marlowe lead PNC
Bank’s healthcare consulting division. Mr. Dazley has 30 years of healthcare experience in
various organizations, including the office of the U.S. Surgeon General, managed care
operations, finance, administration, and consulting. He has worked as a healthcare consultant since
1996, for Ernst & Young in the Los Angeles healthcare consulting practice, Phase 2 Consulting and
Premier. Marlowe has participated in numerous strategic planning engagements, mergers and
acquisitions and performance improvement initiatives and has led numerous financial turnarounds for
clients across the country specializing in healthcare strategy, revenue cycle improvement and financial
operations initiatives. Mr. Dazley received a dual Master of Business Administration and Master of
Health Services Administration from the University of Utah. He is a member of the Healthcare Financial
Management Association and has performed numerous speaking engagements at local regional, and
national levels for HFMA including HFMA’s Annual National Institute. In addition, he delivers numerous
addresses to the University Health System Consortium, State Hospital Associations, hospital boards
and medical staff and various other industry leaders.
Other Clinical Quality Improvement Resources
Click to read additional information at www.healthcatalyst.com
Marlowe Dazley

Other Clinical Quality Improvement Resources
Click to read additional information at www.healthcatalyst.com
Health Catalyst is a mission-driven data warehousing, analytics and outcomes-improvement
company that helps healthcare organizations of all sizes improve clinical, financial, and operational
outcomes needed to improve population health and accountable care. Our proven enterprise data
warehouse (EDW) and analytics platform helps improve quality, add efficiency and lower costs in
support of more than 65 million patients for organizations ranging from the largest US health system
to forward-thinking physician practices.
Health Catalyst was recently named as the leader in the enterprise healthcare BI market in
improvement by KLAS and has received numerous best-place-to work awards including Modern
Healthcare in 2013, 2014, and 2015, as well as other recognitions such as “Best Place to work for
Millenials, and a “Best Perks for Women.”

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