We all know the risks associated with self-pay patient accounts. The cost to collect is up to three times higher than on commercial insurance accounts, and the longer a self-pay balance goes unpaid, the lower the probability you will ever collect. The reality is, these problems are here to stay because of rising healthcare costs and more high-deductible, consumer-driven healthcare insurance plans. It’s now common for hospitals to see patients with annual deductibles anywhere from $2,000 to $10,0001—quite a burden for many people. You’ve probably heard the statistic that nearly half of Americans couldn’t come up with $400 to pay for an emergency expense without borrowing money or selling something.2 Unfortunately, some people wouldn’t be able to get the money at all.3
In January, the Kaiser Family Foundation released the results of a survey showing one in five working Americans with health insurance have trouble paying their medical bills. As you would expect, the number is even higher for the uninsured, with 53% facing medical bill problems.4
When patients can’t pay, your accounts receivables (AR) days go up, cash flow slows down, bad debt mounts and revenue shortfalls are almost inevitable.
The impact of self-pay is one more burden for hospitals already struggling to reduce costs and increase revenue. Stepping up efforts to collect past due medical debts on the backend is certainly necessary, and for hospitals with limited resources, there are excellent outside services that can augment the internal team. Overall, Change Healthcare is seeing more and more hospitals and providers take a proactive approach to self-pay. Addressing it up front not only helps reduce AR days by collecting payment sooner rather than later, it also helps prevent bigger, more serious revenue cycle problems that could threaten the hospital’s long-term growth and success. One very important part of this proactive line of attack is patient-friendly billing practices.
Despite industry improvements made thanks to HFMA’s Patient Friendly Billing® project, “patient-friendly” hasn’t exactly been an accurate way to describe a typical hospital’s billing process. To stem medical debt losses, this must change. Keep in mind that patients taking on more financial responsibility for healthcare is new to many people. At the same time, we are all becoming more savvy healthcare consumers and expectations of service in the healthcare environment are changing. Whatever you can do to make the billing process easier and more understandable can help increase collections and improve patient satisfaction.
Even though self-pay risks are clear, many hospitals either don’t know where to begin, or they lack the resources and time to implement a thorough solution themselves. At Change Healthcare, we’ve found the right combination of processes, technology and patient advocacy to help maximize collections and shorten collection cycles on patient balances. Our services include:
There’s no question that self-pay will continue to be a key part of the revenue cycle for the foreseeable future. Partnering with experts like Change Healthcare allows you to take a proactive approach and improve self-pay collections and patient satisfaction without adding high overhead costs. Acting as your extended business office, we help you shorten AR days, increase cash flow, reduce medical debt and optimize financial performance.
Change Healthcare provides healthcare organizations as much – or as little – help as they need to optimize all areas of the revenue cycle, including patient access, coding, charge capture, compliance, medical billing and accounts receivable management.
Learn more about our revenue cycle management services and how we can help you grow revenue and maintain positive cash flow.
2 “ The Secret Shame of Middle-Class Americans,” by Neal Gabler, The Atlantic, May 2016
4 “ New Kaiser/New York Times Survey Finds One in Five Working-Age Americans With Health Insurance Report Problems Paying Medical Bills,” January 5, 2016
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