Revenue Cycle Practices to Reduce Bad Debt in Healthcare?

The amount of bad debt related to unpaid medical bills is a problem, and it’s not going anywhere until certain processes are changed early on in the revenue cycle.

Healthcare business consultant firm Sage Growth Partners has conducted several surveys on the topic of bad debt in the healthcare industry.  In 2018, they conducted a survey among 100 hospital executives and found that 36% of them had bad debts totaling over $10 million, and 6% over $50 million.

This year, they reported that 59% of hospital executives blamed insurance reform for the high levels of bad debt.   

In that same survey, only half of those executives felt they’ll only recover about 10% of that astronomical amount. 

So what can be done about it?

Cost Transparency and Understanding Coverage

One thing that can immediately help the revenue cycle process while developing trust with your patients is up-front communication.  Take take to talk to patients about their procedure, verify their insurance and explain how much of their procedure is covered.  

It’s not uncommon for patients to have some confusion about their insurance.  Hospital visits can be overwhelming and stressful, and it’s possible for someone to accidentally share their secondary coverage and not their primary.

These situations are causing hospitals to do the digging (sometimes through automated coverage detection systems) in order to avoid collection issues.

 

“A relatively simple elective surgery will blow a $2,500 dollar deductible out of the water almost every time. Patients don’t realize that until it happens. So, hospitals should be engaging them early and putting patient-facing estimates in front of them. And it’s really not about collecting money from patients anymore. It’s about getting them financing.” Jonathan Wiik

Principle for Healthcare Strategy, TransUnion

Provide No-Interest Financing and Self-Service Options

The endgame for medical debt is when a hospital or doctor’s office runs out of ways to collect.  So, it’s time to add more options and put more power in the consumer’s hands.  After all, patients are having to take more control of their own medical costs, and more people are making payments via text message, email links or payment portals.

 

They are going to go somewhere where that experience is frictionless. That’s what hospitals have to be aware of,” Wilk said. “The market is highly competitive when it comes to that type of stuff and the ones who are innovating and engaging patients are going to get those millennials and the folks that live paying their bills online.” Jonathan Wiik

Principle for Healthcare Strategy, TransUnion

Make Your Communication and Payment Process Frictionless

Frictionless sounds great, but when it comes to your revenue cycle, what does that mean?  It’s simple – think about it as a consumer and not a debt collector.  What would you want? 

Are you a consumer that likes self-service payment options?

The ability to make a payment 24/7?
The means to make payments via email link, payment portal or text?
A virtual negotiator that takes the stress out of a collection call?
Payment calls that don’t require long wait times, repeating information or frustrating experiences?

This can all be achieved in your contact center today.

The endgame for medical debt is when a hospital or doctor’s office runs out of ways to collect.  So, it’s time to add more options and put more power in the consumer’s hands.  After all, patients are having to take more control of their own medical costs, and more people are making payments via text message, email links or payment portals.

 

“Patients expect more control and want their healthcare experience to be on par with other services. They may love their doctor, but find everything else about their experience frustrating. Our goal is to fix that.” Jeff Mains

CEO, Intelligent Contacts

It’s finally time to significantly reduce that bad debt.

How can we help reduce your bad debt?

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Communication and Payment Preferences of Consumers with Past Due Debt

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