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Myndshft Blog

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May 2, 2022

Why Calculating Patient Financial Responsibility is the Key to Happier Patients and Increased Revenue

by Seth McCulloch | Healthcare Administration, Revenue Cycle Management

Patient Financial Responsibility

Healthcare is like any other service industry: provide the service, get paid.

But unlike other service industries, a consumer (the patient) typically does not incur the cost of the service until weeks, months, or even years after it is rendered. Due to variations of inputs within a given visit or procedure and variables around payer contracted rates, the seller of the service (the doctor or provider) may not even know the cost of the service when it is rendered.

Herein lies the problem.

If a patient is unaware of how much is owed at the time he or she is receiving care, they are more likely to be surprised when the bill arrives — and not in a good way. As a result, the patient may be reluctant to pay the bill in full or on time. In turn, the uncertainty around how much the patient will pay and when leads to unpredictable revenue streams, increased administrative burden and higher overhead cost for providers. 

Patient Frustration

Many healthcare costs that were traditionally shouldered by employers are now being shifted to consumers through escalating deductibles, higher out-of-pocket maximums, and narrower coverage networks. A provider that is in-network this year may be out of next without warning. The use of out-of-network contracted specialists, like anesthesiologists and pediatric intensivists, leads to surprise out-of-network bills for what was expected to be covered services.

According to the “Trends in Healthcare Payments Ninth Annual Report: 2018” from billing service provider InstaMed, 93% of patients have received a bill for more than the expected amount, received an unexpected bill, or have been unexpectedly sent to collections. These unwelcome surprises create a financial hardship for the patient and often result in very dissatisfied patients. And it’s not just the patient experience that suffers. Providers experience reductions in collectible revenue, lower net provider scores, and employee turnover.

In that same InstaMed report, 87% of consumers indicated that it is important for them to know their payment responsibility at the point of service, while 61% would consider switching to a healthcare provider that provides an estimation of costs upfront and which offered flexible payment methods.  

The Trend is Not Your Friend

Earlier this year, the Centers for Medicare & Medicaid Services (CMS) released its annual National Health Expenditure Fact Sheet1 and associated tabular data that covers all U.S. healthcare expenditures from 2017 to present, as well as projections through 2027.  

When we look at the consequences of patient frustration at a national scale we can begin to see the magnitude of the financial risk that this trend poses to healthcare providers.  Three data points, in particular, stand out from the CMS data and have far-reaching implications for Revenue Cycle operations in labs, pharmacies, and other alternate sites of care:

  1. In 2017, out-of-pocket expenses represented 12.3% of the total personal healthcare expenditures in the United States.
  2. Out-of-Pocket expenses are estimated to increase by 4.8% year-over-year through 2027.
  3. Total healthcare expenditures are expected to grow an average of 5.1% year-over-year through 2027 to a total expenditure of approximately $6 trillion.

Considering the staggering amount of out-of-pocket costs that are projected to be imposed on patients, the consequences of providers not collecting as much of a patient’s financial responsibility up front will be critical to their bottom line. 

The Call to Action

It’s clear from the research we’ve cited that the combination of simmering patient frustration and spiraling healthcare expenditures requires decisive action by providers. New strategies to improve price transparency and the patient payment experience are needed now. Automating real-time benefit checks and patient financial responsibility calculation is a great place to start.  

Here’s how to put it in practice:

  • Adopt technology that provides real-time benefits checks and which calculates—rather than simply estimates—patient financial responsibility at the time of service.
  • Educate patients about their financial responsibility and provide price transparency at the time of the order, referral, or scheduling and before they arrive for the service.
  • Collect copays and, whenever possible, the entire patient financial responsibility at the time of service.
  • Make financing options available to patients at the point of care and enroll them in a plan prior to rendering the service or before they leave the premises.
  • Educate front line staff about copay collection and patient financial responsibility workflows, and develop a communication plan.
  • Offer electronic delivery of patient statements.
  • Implement electronic payment options to streamline collections.
    • Only 28% of providers offer electronic statements
    • Only 39% of providers offer autopay
    • Note: 78% of consumers pay non-healthcare bills online
  • Offer mobile payment through platforms like Square and Apple Pay.  


The data points are clear: Patient frustration around price transparency and the payment process is growing as the cost of healthcare continues to increase and more of the burden is shifted to them. The downstream effect of this frustration is often financial pressure and risk for the provider and financial hardship for the patient: a lose-lose scenario.  

By leveraging technology to improve communication with patients and to provide real-time benefit checks and price transparency, providers can reduce patient frustration and expedite the payment cycle. The downstream effect will be more satisfied patients and financial stability for the provider: a win-win scenario.

About Myndshft

To learn more about how Myndshft can provide price transparency through automating Real-Time Benefit Checks and Patient Financial Responsibility, please visit us at or send us a note at

  1. CMS National Health Expenditure Fact Sheet
  2. Trends in Healthcare Payments Ninth Annual Report: 2018 – InstaMed