Aug 21, 2019


3 min read

Validating patient payment as a system issue


OODA Health

We’re excited to be publishing our first white paper on why patient payment is an issue that runs deeper than simply being  a consumer or provider issue.

While there are many challenges with our healthcare system, patient billing seems to be nearing a crisis.  At the policy level, state legislatures and Congress are working on laws to end the practice of surprise billing, while calls for Medicare-for-all cite the systematic unaffordability of healthcare as clear evidence the status quo must go.

As a healthcare technology company with a vision to liberate our healthcare system from waste, we are committed to addressing the crisis of patient billing. As we embarked on our search for solutions, however, we were surprised to find that the prevailing understanding of the ills of patient payment was confined either to the patient or provider point of view. Across articles, studies, and surveys, patient payment was narrowly construed as either a revenue cycle management issue for providers, or a financial challenge for patients. The impact on payers, who play a significant role in this matter, was left unexplored, or at least undocumented.

When we started to explore the payer perspective on patient billing, we heard that provider bad debt was incorporated into rate negotiations with the payer, leading to higher rates and – in a vicious cycle – higher deductibles and subsequent increases in bad debt. We learned that payers felt as though they lacked insight into how consumers experienced their plan designs and therefore didn’t know how to improve them.

We wanted to explore patient billing more thoroughly so we decided to partner with HIMSS Media. HIMSS Media was an ideal partner due to their healthcare technology expertise, and HIMSS surveyed payers and providers to gain directional insight into the broader impacts of patient payment.

Research highlights

The study validated key themes from what we had heard anecdotally in the market while adding nuance to our understanding. Some highlights from the results:

  • 67% of providers incorporate patient bad debt in their payer negotiations,  with 21% using it prominently.
  • 63% of payers said the top member insight they are missing is an understanding of the impact of plan complexity on consumer comprehension and utilization
  • We were dismayed, although not surprised, to see that the pains of patient payment negatively affect both patient compliance and clinician focus on patient care:
  • 80% of patients are distracted by bills and payment resulting in a lower level of compliance and adherence to medical plans
  • 65% of clinicians are distracted by clerical/financial tasks that limit time with patients

Our conclusions

Patient payment is a facet of our healthcare system that warrants change. Meaningful change must address not only the challenges individual stakeholders face, but also the broken aspects of the system that created the challenges in the first place. This change must:

  • Realign incentives across payers, providers, and patients
  • Enable smart plan designs that are administered well
  • Provide patients with a much-deserved consumer experience: simple, clear, fast
  • Relieve providers of administrative burden to focus more  on care

Given our findings, it is unsurprising that payers and providers such as Blue Shield of California, Blue Cross Blue Shield of Arizona, and Dignity Health have committed to groundbreaking initiatives in patient payment. They see the benefits of taking a new approach, consolidating patient billing through the payer, thus enabling providers to focus on care. At OODA, we’re thrilled to be collaborating with these partners and others across the country to transform the patient payment system and deliver a simplified, more affordable member experience. We invite you to join our journey.

To learn more about our study and the pain points across the system, download our white paper here. To learn more about our solutions, follow this link.

Learn about how you can partner with OODA Health to improve your members’ experience and your revenue management.