With all the technology options available to health systems today, hospitals should "absolutely not" get to the point where they're suing people.
Suing patients over unpaid medical bills has been scrutinized a lot in the media in recent months, and while doing so may not be "unique" to any one health system, it certainly can't be called a best practice.
"I think a lot of things have to go wrong before you get to a time where you should be suing patients or garnishing wages or things like that," Waystar CEO Matthew Hawkins tells HealthLeaders.
In early September, the University of Virginia Health System (UVA Health) was the subject of an investigative piece by Kaiser Health News that examined the healthcare organization's debt collection practices. Other media reports have uncovered a similar pattern of lawsuits against patients, including at VCU Health and Methodist Le Bonheur in Memphis.
Hawkins acknowledges that in this era of razor-thin margins, providers are more financially squeezed than ever before.
“You create a bit of a perfect storm where long-time [insurance] adjudication, a lack of a clear understanding about all of the costs and even all of the revenue opportunity and the right to collect…is understood, and then you've got yourself a real mess," he says.
But do you need to get to the point that you're suing people?
"Absolutely not," Hawkins says, especially not in an era where technology tools exist that help providers mitigate some of these problems.
"I would generally say the more progressive health systems or hospitals that are leveraging technology, that are thinking consciously about how…we create a better experience…are the ones that are far less likely to take the avenue of suing a patient to collect on a bill," he says.
It's harder for patients to pay their bills when they're clueless about their healthcare costs; when they're forced to wait months between their visit and when a claim adjudicates to find out their remaining balance; and when they don't have a chance to set up interest-free payment plans early in the process.
For instance, "we know that payment plan adherence is much higher if they know what their financial responsibility is while they're still at the hospital or at the doctor's office than after they leave," Hawkins says. "Patient payment plan adherence seems to go down by significant percentages every 30 days that you wait."
And yet with technology like AI, automation, and algorithms available to health systems now, there's no reason for patients to have to be put in positions where a hospital is suing them or putting liens on their homes.
“Silly things that should not be happening," Hawkins says.
In addition, he says technology is available to help health systems understand their own care costs, rather than relying on antiquated tools and manual work and input that make such an understanding difficult.
This idea was echoed last month when Mike Marquardt, chief financial officer of UVA Medical Center, told HealthLeaders that UVA's first immediate goal is to improve its "pricing strategy."
"[Our pricing strategy] is what any healthcare system is looking at [in terms of] deductibles and more consumerism in healthcare," Marquardt said. "We need to update our practices around pricing and the transparency of pricing to our patients. Specifically, for me as the medical center CFO, and from an operational finance standpoint, this is a continued rally cry around hospitals and health systems truly understanding their cost of care."
Such an understanding may not always be easy to achieve, but there are tools out there that health systems should be unafraid to leverage to help them get there.
"We've never had more technology available than we do now to do this exact thing to make this possible," Hawkins says.
Alexandra Wilson Pecci is an editor for HealthLeaders.
