June 18, 2013 by Rick B
In recent years the healthcare industry has been in the spotlight, and there are a slew of buzzwords surrounding the industry today. Healthcare reform, rising deductibles and co-insurance, increasing health insurance premiums, patient-friendly billing, and healthcare price transparency are just a few.
There are many unknowns surrounding the future of healthcare in the United States. I recently attended a HFMA (Healthcare Finance Management Association) conference and was fortunate to hear some very bright members of our healthcare community speak on a variety of topics. The topics were vast and the content was impressive. The one reoccurring theme at the conference was change.
“The status quo and incremental change will not prepare us for the drastic changes in patient access, insurance, and payments coming our way,”
Richard Clark HFMA President and CEO
There you go, folks, President Clark summed it up perfectly—we’re all going to have to make big changes to keep up with the big changes coming our way.
So, we’ve talked a little about change and have discussed a few common buzzwords. Well, prepare yourself for one more; pre-service collections.
When I first learned about the following statistic, it blew my mind (Drum roll please).
As much as 50% of all receivables associated with patient liability go uncollected.
If you’ve ever been to a casino, you’ve probably heard the expression “the house always wins”. Well, if the Healthcare Industry was a casino, the patients would be the house.
Even more alarming than the fact that half the money billed to the patients goes unpaid, is the fact that we are talking about gross money collected—the cost of collecting these dollars—making countless phone calls, printing statements, postage, employee compensation and other variables are not worked in to this recovery rate. The above mentioned cost-centers are significant and drive down bottom-line revenue even further.
I go back to what Richard Clark said; status quo simply will not cut it anymore.
We’ve already established that the currently accepted billing practices are no longer effective. Getting paid at this low rate would probably cripple any organization; it is simply not feasible to run a business which is not getting paid for their work.
Enter our new favorite buzzword, pre-service collections.
Do you know the probability of collecting a patient’s bill prior to service? 96%.
I need to say it again, 96% probability of collecting prior to the time of service, I like those odds.
When the topic of pre-service collections comes up, someone will inevitably ask, “Won’t that make the patients mad, I wouldn’t want to pay a bill before a service is preformed?” The answer to this question is a bi-product of how well you educate your patients on this new financial policy. Educating and collecting pre-service mitigates the infamous unexpected medical bill that never gets paid. As a matter of fact, a large University Hospital started pushing pre-service collections in 2010. As of May 2013, this Hospital has increased their weekly cash collection by 500%. I hate to be redundant, but they switched to a pre-service collection model and are now collecting 5x more money than they were under a more standard billing method. And, do you know what happened to patient satisfaction over the same time frame? It actually went up and they now have a patient satisfaction rate of nearly 90%!
Status quo will no longer go, but the good news is there is a better way to ensure compensation for your hard work and increase patient satisfaction along the way—Pre-service collections; it’s truly a win-win.
For additional information on our pre-service collections service, PatientConnect, visit United Credit Service, Inc online at http://www.unitedcreditservice.com