Patient Expectations for the Modern Medical Practice (Pt. 3): Patient-Friendly Billing

By: on January 25, 2017

This is no exaggeration—a bad billing experience can sabotage your practice by making it harder to retain patients and collect their payments. A 2014 Connance Consumer Impact survey of 500 Americans found patients are 95 percent more likely to be loyal to a provider if they’re satisfied with the billing process.


Click to see how billing satisfaction impacts patient behavior

Though this particular study focused on hospitals, private practices can’t afford to disregard its findings.

In fact, intuitive billing is such an important issue for all physicians that the Healthcare Financial Management Association even started an initiative, The Patient Friendly Billing Project, encouraging providers of all sizes to implement better billing processes.

By the end of this article, small and midsize practice physicians will be equipped with strategies and software options for improving collections while keeping patients content.

This is the last article in our three-part series about meeting modern patients’ expectations. In part one, we explore outreach tips to engage and educate patients. Part two looks at patient-centered technologies, such as as clinical reporting tools and telemedicine.

Why Patient-Friendly Billing Is Key for Modern Practices

It’s never been more important for practices to implement patient-friendly billing techniques. After all, out-of-pocket patient expenses have “skyrocketed” over the past few years. (This is partly due to the prevalence of high-deductible health plans brought on by the Affordable Care Act.)

Since practices nowadays are spending more time collecting patient payments, doctors should see this as an opportunity to upgrade their billing tools. We interviewed David Zetter, a member of the National Society of Healthcare Business Consultants (NSCHBC), to explain why modern providers should prioritize their practice’s financial needs.

“Without embracing the business side of running the practice, you will not know where you are or where you are going. It’s like setting out on a drive across the country without GPS or a map.”

David Zetter, National Society of Healthcare Business Consultants (NSCHBC) member

So where is the road to prosperity when it comes to patient collections? We turned to Gartner’s “Business Drivers for Healthcare Provider Information Technology Decisions, 2016” report (available to Gartner clients) for some guidance. In it, the authors write:

“Healthcare providers are dealing with a combination of powerful demand forces—like increased competition and the empowerment of the consumer/patient—that increase uncertainty in their business models in terms of services to offer, the operating model around them and the related financial return.”

Small practice physicians are no doubt feeling the effects of increased competition and patient empowerment described in this quote. For example, it used to be pretty rare for doctors to market themselves, but it’s now a “must” for many. Thanks to the rise of online reviews sites and physician scorecards, patients have easy access to resources for rating and comparing providers.

These conditions can make any doctor second-guess whether they’re offering the right billing services for patients, operating a cost-effective business model and optimizing their financial return strategy.

We thought about how small practice physicians can address these uncertainties and came up with three patient-friendly initiatives that can make a positive impact:

Initiatives for Revenue Cycle Improvements
revenue cycle improvements

Patient-Friendly Initiative 1: Online Bill Pay

If you’re still relying on snail mail and phone calls to collect balances, chances are you’re disappointing a significant percentage of your patients.

A 2016 study by Apex and InfoTrends (which is gated, but free to download) surveyed 1,000 patients and discovered “there is a gap between how they are currently paying their healthcare bills and how they would prefer to pay them.”

The researchers found 62 percent of respondents say they want to receive health care bills electronically, but only 42 percent actually do.

That’s a shame, since practices that do offer online bill pay services find it reaps many benefits for both patient and provider:

Benefits of Online Medical Bill Pay
medical bill pay benefits
How can small practices apply this initiative?

There are several different ways to start offering online bill pay, such as setting up a PayPal account or implementing dedicated payment processing software. However, the type of tech that will give small practices the most bang for their buck is a patient portal.

Patient portals are secure websites that allow patients to message care teams, schedule appointments, refill prescriptions and more. We conducted a survey to gauge consumer demand for online bill pay on portals. Here’s what we found:

view medical bills stat


Just think of how much faster you could be receiving patient payments if nearly half your panel paid through the portal. Even so, practices with tight budgets may be hesitant to implement new tech because of the associated costs. Zetter says they shouldn’t be.

“Money up front would remove the need for billing staff to be following up on patients for collections, and it would also reduce AR and the lack of revenue collected that is currently written off as bad debt,” he explains.

Once you’ve decided it’s time to invest, you’ll choose one of these two deployments:

  • Stand-alone patient portal. These vendors only offer the patient portal application. They are often less expensive and less robust than an integrated suite.
Bottom line: Online bill pay can modernize small practices because it gives patients a more convenient, accessible and tech-savvy way to settle their balance.

Patient-Friendly Initiative 2: Concierge Medicine

Concierge medical practices require patients to pay a flat membership fee for medical services instead of (or in addition to) billing the patient’s health insurance company. In exchange, patients get perks that may include house calls, same or next-day appointments, 24/7 access to the physician and longer examination times.

You might be skeptical about the “patient-friendly” aspect of this suggestion. After all, why would patients be willing to pay even more for your time? Didn’t we just say out-of-pocket medical expenses are already at a high?

I hear you—Stay with me!

The reason we’re including concierge medicine is, some people will actually prefer to pay extra for this type of personalized service. See for yourself in these patient testimonials for a concierge practice in Nashville, Tennessee:

Source: Cypress Concierge Medicine

It’s a win-win because you get happy patients and a new revenue stream. The business model may be different than a traditional practice, but even that is beneficial. As we said earlier in this article, providers should consider alternative operating models to combat some of the financial uncertainties in today’s health care industry.

For example, there’s much anxiety about the negative impacts physician payment reforms will have on small practices. Wouldn’t it be nice to reduce your financial dependence on these payers?

How can small practices apply this initiative?

First, we should note there is a certain amount of risk involved when you transition to concierge medicine.

“This does not work everywhere,” cautions Zetter. He’s right. General practitioners may find it easier to find enough patients willing to pay a retainer, but it’s not a recommended model for specialists, such as endocrinologists.

What’s more, some physicians argue concierge medicine is unethical because it puts lower income populations at a disadvantage to access care and may breed a sense of entitlement among high-paying patients.

It’s a decision that shouldn’t be taken lightly, which is why the best way for interested doctors to do this is to implement a “hybrid” concierge model. That means the practice keeps operating as usual, but the physician blocks off several hours a week to tend to a percentage of the practice’s concierge patients. That way, you can test out the model while mitigating risks.

For more guidance on how to introduce concierge medicine at your practice, including a case study and product recommendations of software that can assist with the transition, check out this free report: “A Concierge Medicine Guide: Definition, Salary & Set-Up Info

Bottom line: The concierge medicine operating model can meet patient expectations for excellent care while reducing your dependence on insurance reimbursements and creating a new revenue stream for your practice.

Patient-Friendly Initiative 3: Patient Payment Plans

Now we’ll switch gears to talk about patients who are having trouble paying their current health expenses. A recent study by Navicure and Porter Research showed 31 percent of practices surveyed say patients’ inability to pay is their biggest billing challenge.

Sometimes practices resign to writing off past-due balances as losses, but that can do serious harm in the long run. Small providers are already in a financially precarious position due to the high operating costs of running an office and reduced reimbursements. You should try to collect every dollar you’re entitled to or else your financial returns will suffer.

The alternative here is to create and manage payment plans for struggling patients. This kind of flexibility can make a big difference in helping patients comply with their financial responsibilities to your practice.

Benefits of Patient Payment Plans
patient payment plan benefits

Source: Medical Group Management Association

How can small practices apply this initiative?

You could outsource billing services so someone else is responsible for creating and managing payment plans. However, most practice management software systems allow you to do this in-house without the need to hire extra staff.

An Installment Summary Report in PracticeSuite software

This option is particularly attractive for physicians who want to automate other aspects of their revenue cycle management, such as insurance verification and claims tracking. (To compare pricing for dozens of budget-friendly systems that can handle these functions, click here.)

Once you have a system in place, get the word out. Educate existing and new patients about this option so they will be upfront about their needs. You can even designate someone in your office to be the point person for all patients’ questions about your payment plans.

Bottom line: Modern practices understand patients may be struggling with the financial burden of paying more for care. Reduce outstanding balances by leveraging software to create payment plans.

Next Steps

Billing is usually the last part of a medical encounter. Don’t let things end on a sour note. Research shows practices who work to proactively improve the billing experience are rewarded with more loyal patients and better collections results.

“Practices need to change their entire thought process on revenue cycle management today because what worked five years ago and in the past no longer works,” says Zetter.

In the spirit of simplifying changes to modernize your practice and meet patient expectations, here’s a recap of the topics we’ve covered:


Billing goal Patient-friendly initiative
Expand services Offer online bill pay
Re-evaluate business model Consider concierge medicine
Optimize financial return strategies Implement payment plans


Email me at for more information on this series and sign up for our newsletter to get more tips and recommendations to help your practice succeed.

You may also like:

Patient Expectations for Modern Medical Practices (Pt. 1): Patient Outreach

Patient Expectations for Modern Medical Practices (Pt. 2): Patient-Centered Technology

A Concierge Medicine Guide: Definition, Salary, and Set-Up Info

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