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Online Recurring Payments Cut Bad Debt Simply, Cheaply

Karen Minich-Pourshadi, for HealthLeaders Media, November 8, 2010

“We really needed to move the needle on that metric,” says Reiner. “Hospitals aren’t really in the business of, nor is it our core competency to, monitor long-term collections or to remind people of payments.”

In an effort to reduce billing that ended up in long-term collections, without resorting to sending bills to an “early-out” collection agency, last year the health system decided to expand its use of self-service technology to give patients the ability to enroll online in recurring payment plans for outstanding balances, he explains.

The costs were minimal—Adventist simply added a new component to its existing NCR healthcare self-service kiosk, and then the vendor connected Adventist with a credit card processing partner to take care of the back end.

“This program takes the burden off our outsourced [collection] agency and it’s patient-friendly. It also reduces our overall expenses,” says Reiner, who estimates that Adventist has approximately 250 patients monthly using the recurring payment option out of the 2,400 patients who use monthly online payment.

The online option allows patients to set up recurring payments that extend up to 36 months with a minimum of a $50 payment each month. The patients’ credit card information is stored in the system and then automatically charged until the amount owed is fulfilled.

As a result, Adventist has increased collections by $150,000 per month while saving 6-10 cents on every dollar by avoiding using the “early-out” agency. Moreover, if there is refund due back to the patient, Adventist can refund the amount to the patient’s card, preventing the need to cut a check. Refunds via check cost an estimated $4-$7 versus the $2-$3 for using a credit card.

It’s such a simple addition, but with much of the low-hanging financial fruit from quick cost cutting gone, adding an online recurring payment option to your website may offer just one more opportunity to decrease bad debt and increase the bottom line.


Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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