Help the Uninsured (Without Going Broke)

Since the implementation of the financial counselor roles three years ago, Eggert says, Orlando Health has seen "an immediate 25% increase in our point-of-service and pre-service collections. We are pushing $10 million this year in pre-service collections. We were hovering in the $5 million to $6 million range annually before we put in the full-blown, cross-trained financial counselor role three years ago."

At Shands Healthcare, the eight-hospital health system serving Jacksonville, Gainesville and northeast Florida, the push for financial responsibility also starts at the point of service whenever possible, says William Robinson, senior vice president and chief financial officer. Shands has seen its free healthcare for eligible patients—not including bad debt—grow from $60.9 million in 2005 to $103.5 million in 2007. "We do spend some time up front with financial counseling and the patient. We do that when we can for most nonemergent care where you can identify the person with weak or no insurance coverage," Robinson says. "You can start to talk to them about the likely costs of the care and the best way to pay for it. You create a dialog early, and the better the dialog, the better the outcome."

Robinson says Shands collects about 1% of its net revenues—between $11 million and $12 million annually—from all of its point-of-service payments, including copays, deductibles from the insured, and partial payments from the uninsured. But one strategy that Shands and Orlando Health are not pursuing is the use of medical credit cards or medical loans with outside third-parties. Eggert says there is too much instability and turnover in the field, with companies constantly folding; Robinson agrees that there is too much potential downside. "You're putting someone between you and the patient," he says. "I might get some money for it, but ultimately someone else is going to pursue that patient, and they might use different pursuit tactics than we would feel comfortable with. It's still my patient and it's still our community, and I would get a black eye for it."

Further complicating the uninsured equation is the fact that just because someone is uninsured doesn't mean he or she is indigent. Sheila Schweitzer, CEO of CareMedic Systems, Inc., a St. Petersburg-based consulting firm, says a review of CareMedic clients' patient mix found that 31% of the self-paying patients whose accounts ended in bad debt were wage earners making six-figure salaries or greater. "It's not that patients don't have the ability to pay; it's that the industry has not caught up with the shift of first-dollar payers yet," Schweitzer says. "Service providers don't know when to ask, how much to ask and how to deal with their patients on a self-pay basis."

Part of the problem, Schweitzer says, is that the healthcare industry is in the middle of a cultural shift toward a retail environment and that hospitals have been slow to adapt to the new reality. She says healthcare providers must be able to give patients a front-end assessment of their financial obligations and determine their ability to pay. "The real key is to have the patients understand their obligations at the beginning of the process so you have less ill will at the end," Schweitzer says. "Traditionally, that has not been the way the healthcare industry has worked. In fact, it's almost been the exact opposite."

All about integration
Employing hundreds of primary-care physicians is not an option that many large health systems would treat with much sanity. Why hire a group of doctors who are reimbursed at such a low level? To some hospital and health systems, employing large numbers of primary-care physicians and integrating their care into a series of ambulatory clinics is not an option. But to Montefiore Medical Center in Bronx, NY, it is the only option.

The payer mix among the 1.4 million people of the Bronx is unforgiving. There are 350,000 uninsured, says Steven M. Safyer, MD, president and chief executive officer of Montefiore. Additionally, 80% of residents who do have insurance—an estimated 650,000 people—are on a government payer, predominantly Medicaid. "We have embraced our community, but we have not embraced it forever," Safyer says.