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A Payments Playbook to Improve Patient Financial Experience

Patient financial management has, in many ways, moved from the back office (coders and billers) to the front office (receptionists and registrars). Leaders are intently assessing the crucial role played by financial relationships in improving the patient experience and creating 360-degree engagement. The clinical encounter is central, but the total experience is greatly shaped by what happens in surrounding administrative interactions.

This eBook shines a light on payments, one of the dominant components of the patient journey. While we traditionally think of patient payments as the final interaction in the process, the reality is patient payments is a crucial element in pre-service, point of care and post-service. This report evaluates the current payments context driving urgency for change, spotlights many of the leading pain points along the patient financial pathway and offers leaders a three-step playbook with a checklist for implementing a versatile payments strategy that works to enhance, not detract from, the patient financial experience.

Step 1: Understand Context Creating Urgency for Change

Patient financial experience has elevated to a C-suite priority through a confluence of visible and powerful factors lending intensity to the issues.


It has been well documented that patients increasingly want more convenient, personalized healthcare. They are looking to health systems, hospitals and physician practices to offer choices and make greater use of popular consumer technologies.
The trend is fueled in large measure by growing patient financial obligation. Many individuals encounter various healthcare affordability challenges, displayed in Figure 1.1

Additional data points show why affordability is top of mind:

  • 28% of workers have a $2,000 or higher deductible, and the average copayment for a hospital stay is $326.2
  • 45% of consumers fear bankruptcy from a major health event.3
  • 30% of Americans were just covering basic living expenses prior to the pandemic.4

At the same time, consumers can obtain care from an expanding array of new providers. These competitors are often skilled at using technology and retail techniques to deliver positive and convenient experiences. Traditional providers clearly face an ever more pressing need to get the patient financial experience right.

Graph showing number of patients with medical bill problems in past year


The pandemic triggered large decreases in provider revenue and income, and surveys show that regaining these losses is a top 2021 priority. Driving top-line growth is also a longer-term objective, a mission that includes reducing leakage of revenue to competitors. The challenge is evidenced by a recent survey in which 31% of leaders stated that their strategy to combat leakage lacks the right tools to succeed.5

The need to diversify a healthcare provider’s sources of revenue preceded COVID-19. However, the pandemic caused a hit to two top revenue generators: elective procedures and emergency department visits, the latter declining by 42% during the early stages of the crisis.6 Through April 2021, emergency department activity remained down 7% from the equivalent prior year period.7

Diversified revenue growth is directly linked to attracting and retaining patients and building a brand reputation. Cultivating long-term relationships with consumers through positive experiences is the durable path to success. The vehicle is streamlined, consistent patient financial management that optimizes resource allocation to reduce cost and devote maximum attention to the patient.

Step 2: Analyze the Entire Patient Payments Journey

Isolating opportunities to improve payment processes requires thorough analysis that holistically examines patient paths from pre- to post-care. Figure 2 indicates that this spectrum involves many payment-related touchpoints. The chief milestones to assess include pre-registration, registration, patient financial counseling, lending, claims submission, receipt and reconciliation, billing and refund management. Each milestone carries potential for positive or negative impact on patient engagement.

Graph showing the different points along the patient financial journey

A holistic process view goes deep as well as wide. Each major step is composed of many sub-steps. Figure 3 lists several just for pre-service verification and discovery. Analyzing all steps can uncover pain points. Following are prominent issues that often occur, broken down by stage.

image listing the steps of patient identity and insurance verification/discovery


  • Prior authorization. During scheduling and registration, important information is gathered, identity and insurance verified and prior authorization sought from payers in most cases. The latter can be particularly problematic and frustrating to patients. An American Medical Association survey found that 38% of physicians report significant increases in the volume of prior authorizations over the past five years, and 54% believe those always or often delay care, with 24% saying they always or often lead patients to abandon care.8
  • Estimation of patient obligation. Studies have consistently shown robust patient interest in knowing costs prior to service. One survey found that 65% of patients say pre-service cost transparency is critically or very important to their experience satisfaction, and those most dissatisfied with this process skew younger, a cautionary sign for the future (Figure 4).9 Unfortunately, health systems, hospitals and physician practices differ significantly in their ability to offer consistent estimates. Smaller organizations tend to struggle with availability of staff to generate estimates.
  • Pre-service patient financing. The desire to extend financing to the patient prior to care is great. However, it is challenging for many hospitals and physician practices who lack the financial resources and risk management skills to offer such options.
  • Charity care determination. Uncompensated hospital care totaled $41.6 billion in 2019, so ascertaining those likely to require charity care is important for the institution as well as for the patient.10 Providers struggle with this task, often needing more staff time or technology tools to do a thorough assessment.



  • Day of care collection. Some providers do not collect any payments at check-in or bedside, while others do so inconsistently. Additionally, many providers restrict payment options. This patchwork of approaches was corroborated by one study that revealed 51% of respondents lack formal policies or procedures for point-of-service collections.11

graph showing number of patients who were dissatisfied with pre-service cost information


  • Insurance processing. Claims submission, denials management, payments receipt and reconciliation are initiated at the conclusion of care. These workflows, shown in Figure 2 (on page 5) below the central line, are usually invisible to the patient, yet problems incurred in these steps can have significant ramifications for individual satisfaction. Remittance management frequently involves manual, paper-based processes executed across multiple departments using multiple, non-integrated data systems. Posting and reconciliation inefficiencies are common and can delay or confuse patient billing.
  • Post-service patient financing. Providers are finding the need to offer an expanding range of financing options to meet divergent patient scenarios. This objective places organizations in the challenging position of acting like banks, with highly variable results. Moreover, CommerceHealthcare® has written extensively about the heavily manual nature of financing processes. Delays, inconsistencies and other frustrations can negatively impact the patient experience.
  • Refund management. Greater pre-service collections and other factors have contributed to a rise in patient refunds. A pre-pandemic analysis estimated that 13% of patients received a refund in 2018 and projected growth to 15% in 2022.12 The study highlighted another source of frustration for the patient — refund options other than via check are rarely accommodated. (Figure 5)

graph showing the percentage of patient refunds volume by method


Leaders often encounter difficulty performing a holistic analysis of the patient financial journey due to several factors.

  • Tightly coupled processes. Interdependent steps and feedback loops complicate efforts to determine problem causation and resolution. Innovative, “non-linear” thinking may be needed to effect proper change.
  • Change of orientation required. Historically, providers have mainly had to concentrate on insurance payments. With the patient now a more substantial factor, meeting the demands of individuals has become paramount.
  • Silos. Departmental, system and workflow silos frequently pose barriers to efficient and customer-friendly transactions.


Step 3: Implement a Cross-Journey Strategy and Program Portfolio

What does building a holistic strategy entail? Its foundation is a payments strategy that unites technology, programs and services in a coordinated, flexible, end-to-end solution. Core strategy requirements include:

  • Integration of payment automation solutions with EHR/ERP systems, which typically function as the central patient engagement platform. The payments solution should extend the functionality and enhance the value of these substantial existing investments.
  • Seamless fit with current workflows. Independent apps or “bolt-on” solutions often fail to complement processes in place, sapping productivity.
  • Comprehensive yet modular. The right payments strategy addresses the whole patient experience yet can be implemented comfortably for independent steps when needed. That flexibility permits alignment with each provider’s preferred pace of change.

With this strategy in place, CommerceHealthcare® recommends a six-point checklist designed to create the optimal set of programs, services and support.

  1. Emphasize Pre-Service Payment Touchpoints
  2. Maximize Patient Financing Flexibility
  3. Expand Patient Payment Options
  4. Automate Remittance Processing
  5. Streamline Patient Refund Management
  6. Bolster Infrastructure and Partnerships



Organizations are devoting more attention to pre-service to launch patients along a positive journey. Regarding payments, consumers most want education to have their options explained clearly. Healthcare providers are responding in various ways. Some inform patients upfront about outpatient or even virtual care alternatives that may be less expensive. Pre-service estimates are being offered more frequently. Those estimates can then form the basis for another major benefit: pre-service financing to give patients certainty about paying for their care.

Technology developments are enhancing analysis of propensity to pay, qualification for charity care programs and other financial variables to help institutions make financially sound decisions tailored to individual patient needs. Advances in data analytics promise that such tools will only gain refinement.


Whether offered pre- or post-service, highly flexible patient financing is a critical success factor. The COVID-19 crisis underscored this need, and 45% of healthcare providers said they responded with increased flexibility of payment terms.13

A program committed to offering the following features can rapidly satisfy the widest range of patient needs:

  • Open lines of credit extended at 0% APR or low variable rates without credit check or update to credit history. Open credit lines can be superior to traditional loans in that the lines can be adjusted easily if care costs vary from initial estimates and can cover expenses from any additional procedures performed.
  • Longer duration. Rising costs and increased patient obligation are generating need for payment plans of longer duration than usually offered by providers. Teaming with a well-resourced bank can significantly expand options to allow longer terms with manageable monthly payments. CommerceHealthcare® generally counsels clients to strive to keep most payments under $200/month.
  • Recourse and non-recourse financing. Non-recourse plans, frequently favored by healthcare providers, carry limitations on patient qualifications for loans. Recourse programs widen the pool of patients eligible to receive long-term, no-interest packages. Look for plans that feature fee protections for providers and multiple convenient ways for patients to enroll.
  • Process automation. Automating significant steps in application, verification, processing and servicing is critical. The resulting speed-to-complete is a major boost to patient satisfaction, accelerates cash flows and reduces cost.



Providers want to collect patient payments early and quickly. For their part, patients increasingly expect the same level of choice as they experience in consumer transactions. Payment strategies must offer a complete range of secure, convenient payment options, including check, credit card, ACH and mobile phone methods (wallet, text to pay). Merchant banking services can help manage frictionless point of sale payments as well.


As noted, pain points abound in insurance payments processing. Automation of remittance management is still not as ubiquitous as it should be. Frequent delays, inefficiencies and errors remain a source of frustration for patients and staff. Fortunately, considerable opportunity exists in this area.

The heart of the solution is adoption of a unified technology service possessing these high-productivity, high-accuracy elements:

  • Single-system management of all insurance remittance types including checks, paper EOBs, ERAs/EFTs.
  • Bidirectional data integration with patient financial management systems.
  • Automation of remittance disaggregation, posting each payment to the correct financial system, and reconciliation.
  • Reporting and audit trails, allowing management to sustain productivity gains, track KPIs and identify analytics-based improvements.

The upshot of such a service is paperless, exception-based workflows that reduce “cost to collect” and produce fast, repeatable execution to foster positive patient payment experiences.


The right payments strategy also alleviates frustrations associated with patient refunds. First, refunds are system-generated using stored patient information rather than requiring manual collection of data. Second, patients can be paid by check, direct deposit, direct to debit card or other options. Faster, more convenient refunds are a clear satisfaction multiplier for patients.


Providers face multiple constraints, rendered even more severe for many by the COVID-19 crisis, as they seek to satisfy multiple patient experience and market competition demands. To respond to these challenges, healthcare providers should bolster infrastructure and partnerships to build a scalable approach.

For example, an experienced healthcare bank can be a vital collaborator in strengthening the entire payments infrastructure. Capital and lending prowess can enable flexible patient financing strategies featuring open lines of credit and other tools. Merchant banking services can support point-of-sale convenience. A proven technology service can help automate remittance and reconciliation. Finally, healthcare bankers can play an important advisory role, helping the client adapt to healthcare’s dynamic strategic imperatives.

Creating A Better Patient Financial Experience

The key to creating a better patient financial experience is effective communication at all stages of the journey. Maintaining a clear and consistent dialogue with patients about the payments process builds trust and represents a form of empathy for the patient. Providers should also convey the information through the panoply of digital communications as well as traditional face-to-face discussion.
One CommerceHealthcare® client fully scripts its front- and back-end patient financial communications. The pre-service estimate discussion sets the payment expectation so the patient knows what to expect. Ongoing point-of-service and post-service communications keep the patient informed of changes, creating a better patient financial experience.

The benefits of executing the playbook set out in this eBook are clear and meaningful. Patients gain greater access to care, peace of mind through affordable payment options, understanding via steady communications from the provider, and a more personalized healthcare experience. Health systems, hospitals and physician practices achieve a comprehensive payments solution, not a set of limited expedient fixes. This strategic approach to patient payments boosts productivity, reduces costs and adds substantial flexibility to patient financial management. Delivering not only return on investment, but also a return on the patient experience.


The payment process plays a vital role in the patient financial experience. The trends fueling concentration on patient engagement and overall experience make the time ripe to adopt a holistic payments strategy. The technology, services and support from a banking partner are available now to help all providers take a giant leap forward.


  1. Commonwealth Fund, U.S. Health Insurance Coverage in 2020: A Looming Crisis in Affordability, Survey Brief, August 2020.
  2. Kaiser Family Foundation, Employer Health Benefits: Summary of Findings, 2019.
  3. West Health and Gallup, The U.S. Healthcare Cost Crisis, April 2019.
  4. Transamerica, Retirement Security Amid COVID-19: The Outlook of Three Generations, May 2020.
  5. Central Logic, “96% of Healthcare Executives See Patient Leakage as a Priority,” Blog post, October 8, 2020.
  6. R. Grande, “Effects of Postponing Essential Care Due to COVID-19,” Definitive Healthcare, blog post, June 24, 2020.
  7. Kaufman Hall, National Hospital Flash Report, May 2021.
  8. American Medical Association, 2020 AMA Prior Authorization Physician Study, April 2021.
  9. Accenture, 2019 Digital Health Consumer Survey, 2019.
  10. American Hospital Association, “Hospitals Provided $41.6 Billion in Uncompensated Care in 2019,” blog post, January 21, 2021.
  11. Healthcare Financial Management Association, Analyzing Pre-Payment and Point-of-Service Collections Efforts, November 1, 2019.