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Meeting Patients at Their Point of Need

Healthcare's Financial Response During Challenging Times

Access to affordable healthcare has been a formidable concern for several years as patients have been asked to shoulder increasing levels of the cost of care. The economic effects of the coronavirus pandemic have significantly exacerbated this burden for many, while simultaneously impairing the financial health of organizations. The pandemic’s unprecedented nature and uncertain duration have created an urgency to implement responses that relieve the financial pain of patients and institutions alike.

Health systems, hospitals and physician practices need to consider using all available tools. Leaders should opt for solutions that accommodate both immediate and long-term objectives. This eBook focuses specifically on the patient payments area, offering leaders a helpful perspective by summarizing the central challenges and offering a set of four coordinated strategies well-suited to successfully navigate the current crisis and beyond.

Patients Facing Major Financial Headwinds

The evidence supporting steady expansion of greater self-pay obligation is clear. For example, combined premium contributions and deductibles have grown to reach 11.5% of median household income.1 (See Figure 1)

In addition, high deductible plans have proliferated with 28% of workers subjected to a $2,000 or higher deductible, and the average copayment for a hospital stay at $326.2 Many participants in these plans indicate that they lack ability to cover the deductible.

Graph showing increasing cost of insurance premiums and deductibles

Healthcare providers have begun offering financing options to patients. While the type and structure of these programs can vary widely, their overall growth has been significant. For example, provider funding through CommerceHealthcare® supported patient financing plans increased 30% since 2017, driven by a 20% increase in patients signing up for the program. (See Figure 2.)

Graph showing increase in providers and patients using patient financing programs

The average installment amount has risen steadily over the same period to more than $2,000. The deep economic shocks wrought by the COVID-19 crisis have rapidly placed many patients on an even more precarious footing, which is reflected in the CommerceHealthcare® data. The average installment amount peaked at $2,269 in May of 2020, a nearly 13% jump since the end of 2019. That level represents a 23% increase over the average installment amount in 2017. (See Figure 3.)

graph showing year over year increases in the amount patients owe for care.

A study found that 30% of Americans were just covering basic living expenses prior to the pandemic and described the current dilemma created by the COVID-19 crisis as a major financial setback for workers who are facing unemployment, furloughs, reductions in work hours, and pay cuts. The study predicted that many Americans will likely begin to draw down savings, increase credit card debt, and/or dip into retirement savings.3 Another recent survey showed 41% reporting job disruption, with 20% now uninsured as a consequence.4

This financial predicament may lead many to forgo care. Examining pandemic-related drops in hospital procedures, one analysis forecasts that dramatic increases in the number of self-pay patients will likely continue to be a drag on hospitals’ revenue until the economy recovers.5 Consider a few data points. The Centers for Disease Control and Prevention (CDC) cited a decline of 42% in emergency department visits in the early months of the crisis, and many Americans remain fearful of entering hospitals and being exposed to COVID-19.6 Another survey in April revealed that 32% of respondents have made or plan to make adjustments in healthcare spending such as skipping care visits or delaying procedures.7

Adding to the complexity, deferred care heightens the risk of serious medical complications. Over 60% of physicians responding to a Primary Care Collective poll believe that some of their patients will experience avoidable illness due to diverted or avoided care, while 38% feel the diverted care could lead to non-COVID mortality.8

image of anne goodwill pritchett, senior vice president of revenue cycle operations at hackensack meridian health

Case Study Snapshot

Hackensack University Medical Center had tried for years to accommodate uninsured and other patients struggling to pay their bills. However, defaults left the organization with significant uncollected debt.

Learn how interest-free loans resulted in a significant reduction of patient bad debt.

Read more

Organizations Struggling to Respond

As they strive to help patients cope, hospitals and health systems face several financial obstacles. Revenue and cash plummeted drastically as COVID-19 forced deferral of most elective procedures and limitations on outpatient care. At the height of the crisis, hospitals in the aggregate were estimated to have lost the equivalent of $60.1 billion per month from the previous year.9 The American Hospital Association (AHA) projects total 2020 hospital/system losses to exceed $300 billion (Figure 4).10

Graph showing the expected financial losses to providers in 2020 Though volume is beginning to return, the ramifications remain serious. According to a recent McKinsey survey, 30% of respondents expect their 2020 operating margin will be 20% below forecasts, and 15% are not confident they will have enough days’ cash on hand throughout the crisis.11 Further, one-third of respondents anticipate decreased margins of 10% or greater to persist in 2021. The pandemic clearly threatens hospital economics and crimps ability to assist patients financially. At the same time, organizations have responded to social distancing edicts by having many employees work from home. The resulting operational disruption in revenue cycle and finance departments has complicated the ability to deliver positive patient financial experiences. Manual, paper-based process often increase difficulty in a remote environment. Organizations have been investing in consumer-friendly convenient care, how they handle the experience during this difficult period will influence long-term perceptions and ultimately market share.


Navigating the crisis in a manner that promotes lasting success while helping patients in their time of need entails planning for more than return-to-normal. In the patient financing arena, a substantial opportunity exists to implement a comprehensive platform with new levels of flexibility. Based on extensive practice experience, CommerceHealthcare® recognizes four mutually reinforcing strategic steps as essential to build this platform (see Figure 5).

Diagram illustrating 3 keys to patient dialogue: strategy, technology, payment options

Adopt A Holistic Perspective
The complexity of the patient payment process combined with the still-unfolding nature of the COVID-19 pandemic demand a holistic approach. A 360-degree view should encompass:

  • Simultaneous, efficient management of the complete matrix of payment sources (e.g., insurance, private pay) and transaction modes (e.g., cash, electronic).
  • The end-to-end patient financial journey, recognizing that financing issues occur both pre- and post-service.
  • Ongoing change management. Today’s situation is fluid, featuring COVID-related coding changes, potentially-emerging COVID insurance reimbursements, patient alterations in employment status, and additional factors that will need to be addressed. 

Strengthen The Financial Technology Platform
Technology forms the backbone of an efficient, high-performance financial operation by augmenting staff productivity. Technology-enabled automation of processes is critical. This is best achieved not through multiple independent apps, but with a comprehensive platform that automates across the payments cycle, including:

  • Remittance automation. The foundation is a unified system capable of managing the range of remittance types, from checks to paper EOBs to ERAs/EFTs. Such a system can integrate with patient financial and other systems to create paperless, exception-based workflows in automatic payment posting, unbundling aggregated remittances and directing each to the appropriate financial system, reconciliation, reporting, and audit trails.
  • Flexible patient billing and payment software. Choice is also valuable on the payment side. The right platform enables patients to initiate and make payments online according to the organization’s offered plans.
  • Patient financing support. Automating the application, verification, processing, and servicing of financing removes friction and provides a major boost to patient satisfaction.
  • Refund management. Rising rates of patient refunds call for a disbursements platform that eliminates the burden of manually collecting, retaining, and managing payment information. Patient satisfaction is heightened through speedier refunds and accommodation of multiple payment vehicles: direct to debit card, direct deposit, or check.

An added advantage of the kind of automation identified here is that it alleviates many of the inefficiencies inherent in work from home. This enables revenue cycle management (RCM) staff to maintain a positive relationship with patients under strained conditions.

Expand Versatility of Patient Financing Options
A bedrock element in maximizing patient access to affordable care and reducing stress is the ability to offer an array of financing options that can be tailored to each patient’s needs. This requirement is timely. In a recent survey, 45% of healthcare providers said they have increased the flexibility of payment terms for patients impacted by COVID-19.12 In March, CommerceHealthcare® worked with organizations to offer similar relief measures for patients, including payment deferral and waiver or refund of late payment fees for up to three months. More than 600 patients requested a relief option in the peak month of May, a 175% jump from April. (See Figure 6.)

Graph showing number of patients requesting relief in paying medial costs

The challenge, particularly in this pandemic environment, is healthcare providers are frequently tasked with playing the role of healthcare provider and bank. In regard to lending flexibility, healthcare providers are constrained which limits the options available for patients. A strong bank with experience in the healthcare environment can help alleviate these challenges. Banks can help providers implement an expansive financing strategy without tying up capital. Optimum patient choice embodies at least the following characteristics:

  • Open lines of credit rather than just traditional loans. Credit lines can consolidate charges incurred from multiple procedures and across multiple health facilities.
  • Longer duration and other flexible options. Organizations typically limit the terms of their plans. Yet growing self-pay combined with the increasing cost of care leads many patients to need longer payment plans. A bank delivers financial security, credit expertise and scalability to healthcare providers which can result in longer and more varied options for patients.
  • Use of both recourse and non-recourse financing. Recourse programs overcome some of the limitations of non-recourse plans. Recourse can significantly expand the financial options available to patients. These programs typically include fee protections for providers and easy enrollment for patients (over the phone, online, or in person).


Maintaining an Ongoing Financial Dialogue

Together the three solutions described empower the fourth element of the strategy: maintaining a positive, consumer-friendly, end-to-end financial dialogue with patients to address their needs at multiple points of concern. Healthcare providers can become well-positioned to serve patients’ financing needs by focusing on two key junctures of the patient journey.

Typically financing discussions and arrangements occur after medical service is rendered, charges are billed, insurance reimbursement is determined, and remaining out-of-pocket obligation is calculated. Providers and insurance companies are increasingly offering pre-service estimates. This trend responds to the industry’s drive for greater overall transparency, heightened concerns about surprise billing, and a growing desire by patients for more visibility into their payment obligation. (Visibility which is also playing a factor in patient’s decision to pursue or delay care.)

The focus on pre-service estimates creates both challenges and opportunities for health systems, hospitals, and physician practices. Many organizations are now combining estimates with pre-service payment expectations. The CommerceHealthcare® 2020 Trends Report cited data showing that just over half of healthcare providers have such policies in place. (See Figure 7.) Unfortunately, three quarters of providers say the process needs improvement to be effective.13 This finding presents a significant opportunity to improve patient communication, and ultimately patient satisfaction.

Graph showing the percentage of providers collecting preservice payments from patients

Offering patients flexible financing options during pre-service can be a game changer. However, it is imperative that financing leverages an open line of credit based on estimated out-of-pocket charges. By utilizing an open a line of credit, the program can be seamlessly adjusted to match a patient’s actual cost of care.

Discussing options with patients and securing financing during pre-service is particularly important in the current COVID-19 environment. It can provide patients peace of mind as they will know how much they will pay each month and how to make payments. It can also reduce the likelihood of a patient delaying care due to anticipated cost.

The period after completion of services remains critical for patient billing and financing. It is also the crucible for managing patient needs effectively and offering a good financial experience. As a result, post-service is where the holistic, automated, dynamic platform creates high impact. CommerceHealthcare® experience consistently shows that patients present with myriad financial scenarios and abilities to pay. Many need longer payment times than offered by conventional provider-sourced payment plans. Others need more flexible terms or have prior credit issues.

A toolkit that meets the broadest array of needs at this critical stage involves lines of credit encompassing no- and low-interest rates for various durations and featuring options for no credit check and no update to credit history. Speed-to-complete is maximized with minimum friction. Relying on a bank to deliver this flexibility carries an additional benefit. Evidence suggests that people broadly perceive a more formal loan relationship with a financial institution than with a hospital or physician practice. This perception enhances the likelihood of patients’ debt maintenance.

Pre-service decisions may also resurface at this stage, and flexibility may again be necessary. A line of credit that has been issued based on an estimate often raises concern about how a variance from the estimate is handled. The optimal lending platform should be able, without time-consuming involvement from internal RCM staff, to take the following corrective actions once final charges are known:

  • If original service cost was underestimated, the patient’s line of credit should be automatically adjusted to accommodate the increase.
  • Overestimated cost should similarly trigger a downward adjustment. In addition, if any refund is owed, the platform should automatically issue it through a disbursements platform that eliminates the burden of manually collecting, retaining, and managing payment information. It should also accommodate multiple payment options including direct to debit card, direct deposit, or check.
mercy health system executive leaders

Case Study SnapShot

Mercy health system in St. Louis encounters complex patient financing needs throughout its more than 40 hospitals and vast outpatient network. Mercy relies on Health Services Financing (HSF®) to help patients consolidate bills and make payments through no-interest loans.

Learn more

The Many Benefits of Meeting Patients at Their Point of Need

  • Optimizes patient access to care in difficult times.
  • Alleviates specific financial concerns arising from the COVID-19 environment.
  • Offers patients peace of mind, both pre- and post-service.
  • Helps minimize negative health repercussions from deferred or avoided procedures by removing financial barriers to pursuing care. 
  • Delivers a personalized, streamlined financing process.
  • Fosters patient satisfaction and loyalty.


Toward a New Resilience

A broader result of the strategy should be noted. It contributes to building organizational agility and resilience to weather the vagaries of the pandemic and respond to future challenges. As McKinsey concludes, the significant financial impact of COVID-19 has created an imperative for health systems, hospitals, and physician practices to evolve in new ways and accelerate into the next normal.14


The ability to meet patients’ financial needs at multiple points during the continuum of care has never been more critical. It takes maximum flexibility and strong financial partnerships. The four-step strategic roadmap presented in this report points clearly to the kind of patient payment program that has the agility, efficiency, and coverage to help providers and patients navigate current and future challenges together.


  1. Commonwealth Fund, Trends in Employer Health Care Coverage 2008-2018, November 2019.
  2. Kaiser Family Foundation, Employer Health Benefits: Summary of Findings, 2019.
  3. Transamerica, Retirement Security Amid COVID-19: The Outlook of Three Generations, May 2020.
  4. J. LaPointe, “1 in 5 Adults Reporting Job, Coverage Disruption Now Uninsured,” RevCycle Intelligence, June 25, 2020.
  5. Strata Decision Technology, National Patient and Procedure Volume Tracker, May 11,2020.
  6. R. Grande, “Effects of Postponing Essential Care Due to COVID-19,” Definitive Healthcare, blog post, June 24, 2020.
  7. PwC Health Research Institute, “The COVID-19 Pandemic is Influencing Consumer Health Behavior. Are the Changes Here to Stay?” blog post, April 2020.
  8. Primary Care Collective, Primary Care & COVID-19: Week 8 Survey, May 6, 2020.
  9. Strata Decision Technology, National Patient and Procedure Volume Tracker, May 11,2020.
  10. American Hospital Association, Hospitals and Health Systems Continue to Face Unprecedented Financial Challenges Due to COVID-19, May 2020.
  11. B. Broome, “The Financial Impact of COVID-19 on Health Systems and How CFOs are Responding,” McKinsey & Company, blog post, June 3, 2020.
  12. B. Broome, “The Financial Impact of COVID-19 on Health Systems and How CFOs are Responding,” McKinsey & Company, blog post, June 3, 2020.
  13. HealthLeaders, Revenue Cycle Intelligence Report, October 2019.
  14. B. Broome, “The Financial Impact of COVID-19 on Health Systems and How CFOs are Responding,” McKinsey & Company, blog post, June 3, 2020.
image of the nebraska health patient financing team

Case Study Snapshot

Nebraska Health noticed an increasing number of its patients had high deductible health plans. Meanwhile, the health system also noticed its accounts receivable balance starting to grow.

Seeking a solution that would serve both patients and the organization, Nebraska Health turned to a patient financing program.

Read Nebraska Health's Story