How to Increase Receivables While Preserving Patient Relationships

David Morrisey, for HealthLeaders Media, November 29, 2010

In this volatile economic environment, it's no surprise that hospital staff members who collect money at the beginning and end of service have their work cut out for them. Securing patient-pay receivables is getting more difficult by the day, and with bad debt, now around 7%-10% expected to mushroom, successful collection has never been more important to a hospital's bottom line.

For many hospitals, patient-pay dollars mean the difference between bottom-line profit and loss. Nevertheless, many accounts receivable departments continue to rely on marginally effective collection strategies to recoup what is owed.

The simple truth is that there are methods and techniques available for your team to achieve the objective of collecting a significant percentage of outstanding revenue, while still preserving positive relationships with patients, and casting your organization in the best possible light.

The Challenge
If you thought the major obstacle in health care debt collection stemmed from an inability of most patients to pay their outstanding bills, particularly their deductibles and co-pays, you'd be wrong. Approximately 65% of bad debt comes from patients who carry insurance, moreover approximately 50% of patients with "written-off" accounts actually have the ability to pay in full.

If that's the case, why isn't every hospital collecting all the money that they are owed?

The crux of the non-payment issue lies with the patient and, to a large extent, your own staff level of comfort with the process of collecting these deductibles and co-pays upfront. Although it is likely your organization's policy to collect this money, your team may not be trained to do it effectively. As a result, your internal collection mandates simply aren't enforced.

Exacerbating this situation are the patients. Being asked to pay at the point of service triggers a fight or flight response in many people (and the combative ones tend to accuse the institution of caring more for revenue collection than the patient). So your second challenge is to change your patients' perception around this process.

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