InstaMed Blog

It’s no secret in the industry that payment responsibility for patients has increased over the years. Despite trends repeatedly indicating this increase, providers still struggle to collect efficiently and effectively from patients. Automated payment plans offer a solution to allow providers the ability to collect large balances with fewer administrative resources. The key to successful payment plans, however, is automation. Don’t think they are practical or vital to patient collections? Keep reading for a deep dive into the why and how of automated payment plans.

Why the need for automated payment plans?

  • Growth of patient balances: High deductible health plans (HDHPs) are a popular way for both employer groups and individual members to manage the growing cost of monthly premiums by shifting the financial burden to higher out-of-pocket responsibility for medical services. HDHPs have become so popular that in 2018, 85% of covered workers had a deductible, up from 59% in 2008 (KFF). Not only are more consumers enrolled in HDHPs, but the average deductible has reached $1,573 in 2018, up from $735 in 2008 (KFF).
  • Provider collection woes: Despite the growth in patient responsibility spurred by HDHPs, provider collection processes generally have changed very little. Providers still focus most efforts on collecting from payers and leave patient balances to be collected via paper statements. This could be why 67% of providers said that their primary revenue cycle concern is patient receivables (Trends in Healthcare Payments Ninth Annual Report: 2018).

Automation is key with payment plans

Payment plans let patients pay a large balance over time. This gives patients the ability to better manage their costs as more than half would not be able to pay a $1,000+ medical bill (Trends in Healthcare Payments Ninth Annual Report: 2018). However, payment plans could be a drain on resources if providers stick to their usual paper and manual processes to collect each month. Instead, automating payment plans allows providers to collect without manual intervention or paper statements – actually reducing administrative costs while guaranteeing payments.

Everywhere you go – automated payment plans

From furniture sales to vacation planning, automated payment plans are a successful tool to help consumers manage costs without taking on debt. Consider that a common kitchen appliance such as a refrigerator can cost thousands of dollars, payment plans make price tags more digestible for consumers.

Best practices for automated payment plans

Before implementing payment plan functionality, providers must remember that the goal is to make large balances easier for both their organization and patients. Robust reporting tools can show providers outstanding patient payments broken out by what’s secured in a payment plan versus general collections. In addition to automation, couple payment plans with paper suppression and eStatements to truly be convenient and cost effective.

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