Almost half of hospitals senior executives responding to a recent Transunion survey reported a marked (between 6 and 10 percent) growth in bad debt over the past 18 months. Over 25% realized between 11 and 20 percent growth in this key metric.
Other key survey findings include:
- Almost 80 percent of hospitals executives are worried that Consumer Directed Healthcare Plans will cause bad debt to grow over the next 24 months.
- When ranking business objectives in order of importance, 43 percent of respondents said increasing collections at the time of service and post discharges were their number one objective, followed by improving operational efficiencies at 21 percent and decreasing bad debt at 18 percent.
These data points show a compelling need to revisit medical practice patient collections and insure it is being done effectively and efficiently. Tools and approaches that can serve a practice well include:
- Expand your use of the latest generation of on-line bill presentment and payment acceptance services/applications. These latest tools prevent you from ever being unable to accept a form of payment and they can lower your cost of pursuing patient balances.
- Never miss a patient payment because you have a credit card reader break. Also, do not allow credit card processing to create a backlog at check-in or check-out. Install a second credit card reader. In addition, use one that includes the ability to take a regular check and instantly deposit the funds into your account.
- Establish a consistent policy on whether you'll reschedule these patients or let them see the doctor and mail in their money later. If you choose the latter route, make it easy for patients to remember their responsibility. Hand them a self-addressed envelope marked "COPAY-URGENT".
- Use a tiered approach to patient collections and match the collection effort not with the patient balance but with the expected payment. Credit Cards use this technique through the use of credit score. They know that a $2,000 balance on a consumer with a credit score with 720 is worth more to them than a $3,000 balance on a consumer with a score of 600. You can use this approach by looking at patients past payment patterns, healthcare credit scores (there are services that provide these) and/or employment status.
- Use a monthly bonus system for employees that collect patient payments in the office. Make the amount meaningful and the metrics clear and easy to track.
The tips and techniques above can help protect you from the growing specter of bad debt.
Copyright 2008. Carl Mays II