With the rise of machine learning as a vital technology for business, the term personalization has gained popularity in a variety of industries over the past decade to describe the capability of a set of digital technologies to offer experiences to users that are tailored to meet their needs based on deep insights into their individual characteristics and behaviors.
Think of when Netflix nails their recommendation and you discover a new movie or show that you fall in love with, or when you get an email in your inbox with a discount for an item you didn’t know you needed but now can’t live without. That’s personalization. Those moments of connection with the brands you love are not the result of random stabs in the dark but are rather more akin to educated guesses on steroids.
Personalization pairs the use of consumer data with predictive analytics to “create much more personal and “human” experiences across moments, channels, and buying stages.” In the field of marketing, personalization is described as “the implementation of a strategy by which companies deliver individualized content to recipients through data collection, analysis, and the use of automation technology.”
Personalization has been a boon for organizations looking to develop deeper connections with their customers. The importance of balancing data driven insights and individualized communication with automation here cannot be overstated. This balance allows vendors and the organizations they serve to build workflows that match the personal touch of in-person assistance while tapping into key long term operational objectives like driving growth, increasing productivity and optimization, reducing workload, and eliminating manual errors. This process “reduces the time it takes to to achieve a task, the effort required to undertake it, and the cost of completing it successfully.”
80% of companies that have incorporated personalization strategies into their customer journeys have reported meaningful uplift. Companies who organize their customer workflows around personalization on average have demonstrated a $20 return for every dollar that they spend. With such a powerful return on investment, more companies are beginning to take notice. According to the independent research firm Forrester, 89% of digital businesses are purchasing personalization technologies.
While taking a more streamlined and personal approach to consumer engagement has proven to be enormously beneficial in helping businesses achieve operational excellence, it has also proven to be highly valued by the user, becoming their preferred method of communication. As conveyed in a recent report, 72% of consumers surveyed stated that they only engage with personalized messaging. Similarly, 71% feel frustrated when their purchasing experience feels impersonal. When organizations incorporate personalization into the consumer journey correctly, it meets “customer's needs more effectively and efficiently, making interactions faster and easier and, consequently, increasing customer satisfaction and the likelihood of repeat visits.”
As founders of the patient financial care movement, Flywire pioneered using personalization to gain insights into a patient’s financial profile, re-shaping the financial experience and focusing the conversation around driving affordability as a shared benefit for both patient and provider.
What follows is part one of a two part interview with Cristobal Leal, Senior Product Manager for Flywire, about the ins and outs of personalization, what it is and isn’t, and why it’s the most important thing for a provider to get clarity on from vendors if they want to create a cutting edge financial experience.
Driving Affordability Through Deep Customer Insight
Fact: In healthcare, patients have been demanding more affordable options for some time. 47% of patients can’t pay a medical bill of $400 or more. Personalization helps bridge the affordability gap, providing real insight into what patients can afford.
CALEB B: Can you give a definition of what personalization is as it relates to what Flywire is doing, because the word can mean slightly different things depending on what industry it’s in or even within our own industry depending on who’s saying it?
CRISTOBAL L: In the context of Flywire, the first step to personalization is understanding the patient. We take in a bunch of information or data points about each patient to best train our machine learning model. We have over 200 data points available for each patient, ranging from demographics to insurance, billing information, and third-party financial data. Because machine learning relies on the past to predict the future, we also leverage the significant amount of historical data we have about every patient. As you might suspect, there is a lot of powerful and predictive data there. With an understanding of the patient’s capacity to pay and their communication profile- their preferred method for conversations- we personalize their entire experience from engagement to the online experience and even staff experience to make it as easy as possible for them to pay against their balance. This matching part is critical, as we rely on our suite of payment solutions, such as discounting, financing, and payment plans, to guide patients down the repayment path that is most affordable and feasible for them.
CALEB B: So personalization then, would you say, is basically the driving engine of what Flywire calls its Affordability Suite? It’s the basis for how we tackle the problem of patient affordability for our providers.
CRISTOBAL L: Exactly.
CALEB B: To me, that means it’s the heart and soul of our platform.
CRISTOBAL L: Yes. You can’t solve for affordability unless you know what patients need. And you can’t know what patients need unless you know who the patient is. Personalization is our way of understanding who the patient is and, then, given the insights we have into that patient, we match them with the offer they need that allows them to make a payment.
We then use patient outcomes- i.e. did they pay in full? Did they sign up for a payment plan? etc.-- to feedback into our machine learning model so that we can make a better recommendation for that particular patient, or one that matches a similar profile, next time.
And ideally, this happens as early as possible in the patient journey. We recommend clients incorporate these elements at pre-service because the data shows that the earlier you can meet a patient on their financial journey, the more satisfied that patient will be and the higher likelihood you have of helping them meet their financial responsibility.
Solving Both Sides of the Collections Problem
Fact: Focusing on solving patient affordability leads to higher net collections. Our clients on average have seen a 15% increase in collections by offering patients affordable options tailored to meet their needs.
CALEB B: All right. So you’ve already hinted at it, but let’s tease it out a little bit more, which is the idea of “Why should health systems care about personalization?”. Because, traditionally, they aren’t using these models. They’re doing something closer to a one-size-fits-all approach. They assume all patients have the same capacity to pay, or apply a basic framework driven by something simple such as balance to determine what flexibility a patient may have.
CRISTOBAL L: The reason it’s important is that every patient is unique. And health systems historically have tried to apply a basic framework, especially when it comes to things like, for instance, payment plans.
Payment plans aren’t new, but hospitals have traditionally only offered them as a last resort once they’ve exhausted other options.
CALEB B: You mean as a final concession to collect?
CRISTOBAL L: Exactly, and as high deductible plans have become more prevalent and patient affordability has gotten worse, hospitals have been forced to offer plans more frequently, but even then it is a cumbersome, manual process and the plans themselves don’t solve the patient’s real need because they are only based on the patient's balance. We see many of our newly signed customers wanting to offer payment plans to patients based solely on balance sizes. If the balance size is X, offer up Y months to repay. And as the balance goes up, they might offer a longer payment duration. And if you do the math behind this approach, the assumption is that every patient that has a balance of a certain size has a certain capacity to pay.
So if my balance is a thousand dollars and the hospital says, “I can give you a 10-month payment plan,” you’re assuming I can afford to pay $100 or more a month. This is the assumption health systems place on patients when they apply a limited framework like this. If I can’t afford to pay $100 a month, I don’t have a path to affordability.
CALEB B: And even if you could afford to pay $100 a month, it might not necessarily be true for me. I may not be able to afford $100 a month, but the health system will treat us both the same because of our balance.
CRISTOBAL L: Right. Exactly. In that example where I’m offered a 10-month plan for a $1,000 balance and I can only pay $50 a month, there’s no happy path for me. Instead, I’m forced to stretch beyond my means, which has serious consequences to patient satisfaction and that patient’s personal finances. Most of the time, the patient will default or not commit to the plan in the first place. If I don’t have an affordable option, maybe I’ll make a partial payment of 50 bucks or maybe I won’t pay anything at all.
CALEB B: How in your mind do payment plans impact the hospital’s ability to collect? And what’s the advantage to health systems shaping their revenue cycle around them?
CRISTOBAL L: Payment plans are a must for providers, especially longer payment plans. Even offering 6 months and 12 months is still a challenge for patients when you’re looking at bills that are 1, 2, 3, 4, or $5K. These large balances are becoming increasingly more common with the rise in uninsured patients and high deductible health plans. Patients need 24 and even 36 months to pay off their bills.
We analyzed the impact of payment plan duration across our customers, as we have a wide variety of maximum plan duration from as little as 4 months all the way up to 60 months. We found a statistically significant correlation between collections and patient satisfaction as you increased payment plan duration. This makes sense -- the average patient wants to be able to pay their bill if there is an option there for them.
A lot of our providers have concerns around what we internally call “leakage”. They assume that if you offer longer payment plans, patients will take advantage of that and sign up for longer payment plans when they could have paid sooner. Obviously, time-to-cash is important to providers.
When we looked at payment plan duration data -- 6, 24, 36 months, etc. -- for providers across the 30% of US households that we serve this was not what we saw. Patients were paying to their capacity. It’s pretty consistent. And that indicates patients are paying to their means. If I can pay over 12 months instead of 24 months, even though 24 months is available, I’m going to take the 12 month option. And at Flywire, because of the power in the analytics driving our offer, we never offer a patient a longer plan term than they need. Through personalization we correctly predict a patient’s capacity to pay and then offer them that. So if a patient can afford $100/mo that’s what we offer. If they can only afford $75/mo then we’ll offer them that.
And, again, when there isn’t an affordable option, some patients decide to not pay or they will pay out of obligation, but in doing so, they’re stretching beyond their means, they’re more likely to default or not repay in full, and as a result they’re not as happy about that experience. But for our providers, in using personalization, we’ve seen on average a 15% increase in collections and a doubling in patient satisfaction.
CALEB B: And that’s what’s so interesting to me because then personalization hits on both sides of the revenue cycle problem or aims to mitigate both issues, which is one, healthcare has an affordability problem- most patients aren’t financially prepared for the rising cost of healthcare- and two, there’s also the collections problem- as a business, hospitals are also always looking to improve on collections.
And so really, I think the only thing that solves those two things together- how can we make it as affordable as possible for our patients and also have that ability to improve our efficiency around collections- is personalization. Does that make sense?
CRISTOBAL L: Yes. Because the biggest challenge that we see with patients is making them aware that there is a path to affordability. If a patient doesn’t know that a 24 month payment plan option or extended financing are available, and the patient needs the flexibility those options offer, the likelihood of the patient actually proactively finding that path and taking it is pretty low.
And so personalization is all about presenting the most affordable repayment option, for that specific patient, as early as possible so that they know that there is a path to financial success available.
CALEB B: And so then that tackles the affordability of the patient, it raises patient satisfaction, and delivers on all the tenets of what Flywire aims to do in the market since it also provides a huge uplift for the providers in terms of now they have a system in place designed to optimize collections.
Reshaping Your Revenue Cycle Around Affordability
Fact: A key piece of providing affordable solutions to patients is offering the ability for them to pay over time. In a recent survey of nearly 3000 patients, 90% said that they would like to receive a payment plan offer to help tackle uncovered expenses.
CALEB B: So that leads me to talking more about as health systems look to evaluate the results of an end-to-end patient financial engagement solution it should be designed not only to offer affordability to patients, but- as we talked about with that flipside of the coin- it should be designed to help increase collections by driving self-service and likely fostering higher payment plan adoption. They go hand-in-hand. We want to present patients with the right affordable options to meet their needs so that they feel empowered to act on them and that will increase the hospital’s overall ability to collect.
CRISTOBAL L: Right, and it’s important to note that personalization isn’t just about payment plans. It's more than that. It's about matching patients to the right option at the right time. That could be paying in full, or setting up a payment plan, or paying via external financing, or paying on a discounted balance that is now more affordable. As we introduce more affordable solutions, whether it’s external financing, discounting or other levels of charity and financial care, personalization is intended to automate and drive much of that experience to make it more scalable.
And, by the way, there’s a lot of opportunity on the staff side too for health systems. Don’t waste your time trying to engage with a patient that has a high likelihood of paying; our system will proactively handle this and the patient will pay. Instead, you can focus on the patient who has a hard time paying because they’re going to need more assistance and attention from a provider.
CALEB B: That’s awesome. So then, it allows the staff to focus on higher value for their time activities because these are the people that need more financial help and education. And if you can divert that energy, then as a hospital you’re also going to collect more.
CRISTOBAL L: Yeah, exactly.
CALEB B: Final thoughts as we wrap up part 1 of this interview?
CRISTOBAL L: Yeah. The billing experience is- assuming you’re talking about post-service in this instance- the last touch point for the patient, it’s most likely the last engagement with that hospital. And you think about, for instance, flying in an airline, you might have had the best flight in the world, you flew first class, but you checked your bag, and they lost it when you got to your destination.
If that’s your last experience of that flight, then you’re going to have a sour taste in your mouth. And this is identical to the patient’s financial journey with a health system. If they don’t have a good experience on the tail end, perhaps because they were unable to find and pay with an affordable option, that’s going to skew their perspective of everything that happened before.
Personalization drives the best mutual solution for patients and providers. The patients are trying to pay off as quickly as possible, which is in the best interest of the provider. And on the flipside, the provider is able to increase collections as they introduce more affordability. They’re not going to be repaid if they don’t really offer that anyway. It’s a win-win scenario for the providers.
Building better patient experiences through deep customer insights can lead to faster collections, higher satisfaction, and lasting customer loyalty. Stay tuned for part 2 of this interview with Cristobal Leal, Senior Product Manager, for Flywire where we take an even closer look at the benefits personalization can bring to your revenue cycle.