The fact that these terms – cost, charges, and reimbursement – are often used interchangeably by people working in healthcare only adds to the confusion around billing and payment. Beyond definitions, in failing to grasp the practical difference between cost, charges, and reimbursement, healthcare professionals inadvertently add to the ‘ouch’ factor for patients trying to navigate the financial experience. It is essential that experience leaders understand the basic conceptual differences so they can engage in informed and productive conversations with colleagues, patients, and their families:

As shown in the word cloud below – derived from billing and payment-related comments left by patients who were not likely to recommend the service line or care setting – the front desk stands out as a critical part of the billing experience. Accordingly, many experience-improvement efforts focus on enhancing the courtesy and respect of front-desk staff. While this is essential, the staff must also be familiar with the concepts of costs, charges, and reimbursement, so they can be confident and helpful when talking to patients. Moreover, it is important to note that patients are not likely to use the term ‘revenue cycle’ in their comments, but terms like ‘billing office’ do appear in the word cloud. Revenue cycle teams, who are well aware of the concepts and associated challenges, can help patients and call-center staff navigate the billing and payment process.

Consumerism is expanding in several levels in healthcare, and price sensitivity is one of them. As more people adopt high-deductible health plans, they are more likely to shop around for the best value when they need care. While each hospital operating in the U.S. is now required to “provide clear, accessible pricing information online about the items and services,” it’s fair to say that ‘clear’ and ‘accessible’ are in the eye of the beholder. It is possible to download a spreadsheet with more than 100,000 rows listing procedure or item, DRG or CPT code, standard charges, and negotiated charges…but is it useful from the patient’s perspective?

There is hope that pricing information will become more clear and accessible over time, but hope is not a strategy. Experience leaders could help advance this work by encouraging co-design with patients. It is also important for experience leaders to be aware of the No Surprises Act, which went into effect in January 2022 and is intended to protect people from unexpected medical bills, whether or not they have health insurance. In addition, the Promoting Access to Treatments and Increasing Extremely Needed Transparency (PATIENT) Act of 2023 is a bipartisan bill that was introduced in May 2023 to expand price-transparency requirements.

Given the focus on price transparency, it is sobering that our recent national research on the financial experience – conducted via NRC Health’s Market Insights, the leading online, syndicated study of healthcare consumers in the U.S.– found that only 36% of the survey’s 38,331 participants believe that hospitals and health systems are upfront and transparent about the prices of healthcare services they provide.

Our national data also showed that, while the billing experience is most often characterized by patients as ‘neutral,’ a significant proportion of the people in our sample saw their most recent billing experience as negative. To take a deeper look at how the financial experience affects the overall perception of care, we asked participants to consider the following scenario:

We found that negative experiences with the billing and payment process very clearly neutralize or invert positive care experiences. More specifically, only 18% of patients who had a good care experience would come away with a positive overall perception of care if they had a bad experience with the billing and payment process.

That figure, in and of itself, demonstrates the importance of addressing the fragmentation and frustration associated with billing and payment. Going a step further and dividing the sample into people who were in the Net Promoter Score categories of Promoter, Passive, and Detractor reveals another powerful pattern: A bad billing or payment experience turns off more than 75% of Promoters. The effect is more pronounced for Passives and even more so for Detractors.

It is also important to look at how the billing and payment process is perceived across demographic groups. For instance, the impact of a bad financial experience is greater on females than on males. Given that females tend to be more engaged in healthcare, this finding is an important warning signal.

In terms of race/ethnicity, the impact of a bad financial experience on people identifying as Asian, White, Native American/Alaska Native, or Native Hawaiian/Pacific Islander (low sample size) is greater than that on those identifying as Black or Hispanic. The key is to provide information that is relevant and understandable to each person.

When it comes to age, a bad billing and payment experience is especially detrimental for people aged 18-24, who may have no affinity for any particular health organization, as well as for people aged 65 and older, many of whom may be on a fixed income.

It wasn’t easy to find a positive comment related to billing, but imagine how the overall experience feels when someone can say this about billing and payment:

Instead of this:

The billing and payment experience is part of the overall patient experience. Our data clearly reinforces this point and illustrates that leaders who treat the financial experience as outside their purview do so at their own peril. There is no upside to thinking in silos or reckoning that the billing and payment process doesn’t impact experience because people complete surveys before getting the bill. While experience leaders can’t change cost, charges, or reimbursement, they can have a very important and positive impact on communication and education about billing and payment. NRC Health helps pinpoint areas for improvement and facilitates human-centered design work that amplifies the voice of healthcare consumers and patients to improve the process. Health organizations that make realistic efforts to provide truly clear and accessible pricing information – ideally in concert with payors – are taking a broad view of experience that will benefit their patients. And their reputation.