Self-pay collections account for a growing portion of overall health system net revenue. This is due largely by the prevalence of high-deductible health plans (HDHPs) which in turn, increases the patient’s portion of overall health cost. Between 2014 and 2019, the percentage of covered workers with a general annual deductible of $2,000 or more for single coverage increased by 10%. The healthcare system was already changing, putting more responsibility on the patient, then the pandemic hit.
The growing trend of increased out-of-pocket (OOP) costs for patients have left providers more dependent on a less reliable revenue stream. Additionally, high levels of unemployment that occurred due to the pandemic has increased the number of individuals who may have lost their health insurance altogether, further driving up the self-pay portion.
As the world found themselves amidst a crisis, some health systems suspended patient billing to encourage treatment and stabilize the nation’s health. However, as we recover, patient billing for non-COVID related visits should not be suspended indefinitely. Doing so would result in negative consequences across the revenue cycle, such as increases in A/R days, bad debt write-offs, and resource expense, along with a decline in cash flow.
A secondary challenge that has emerged is the public perception that practices who fail to provide a transparent and patient-friendly billing experience during the pandemic and beyond will falter and adversely affect community trust and reputation.
There is no single solution for how practices should proceed in a post-pandemic environment. However, being strategic in the collection methods that exbibit the right balance between collecting from patients who can afford to pay and providing flexibility for those that cannot are advised.
As a new ecosystem of healthcare continues to evolve, reassessment of key pre- and post-visit activities should also be part of a comprehensive organizational strategy.
Practices can begin re-establishing the landscape by asking some of the following questions to assess their post-pandemic self-pay collections strategies:
• Are patient responsibility algorithms updated to reflect the new economic struggles?
• Does the collections process need to be refined or adapted to alleviate the strain and develop more flexible payment options?
• Can point-of-sale interactions be automated, made mobile, or streamed through a 3rd party service provider?
• Is it beneficial to allow 3rd party financing options so patients can get the care they need, and the business can still recover the self-pay collections?
Onward and Upward, with Empathy & Purpose
As we move beyond the pandemic, healthcare organizations must continue to align process, resource, and technology infrastructure to optimize their self-pay collections strategy. Providers also need to be sensitive to patients’ needs. Those that support a solid and compassionate self-pay collections process in an age of increased patient financial struggles will benefit from removing as much ambiguity as possible.
Building a culture that acts on patient needs and demonstrates empathy while maintaining focus on the organization’s financial requirements should be a foundational tenet.
Providers that fail to proactively address this area of the revenue cycle management inevitably put the business at financial risk. By prioritizing a patient-centric approach combined with transparent billing management, organizations will improve their financial outcomes.
At Alta we recognize the struggles of healthcare organizations and are ready and willing to do what it takes to bring transparency and integrity to revenue cycle management. As a solutions-based company, Alta works with each individual practice to develop a plan and implementation that best suits the needs of the practice. As one of the only RCM companies that completely customizes the solutions experience for our partners, we even go as far as offering a guarantee of improvement in key areas of the business’s revenue cycle.
As the pandemic affected patients not just from a health perspective, but also a financial one, many practices are left facing the ethical question of how to collect patient balances while still maintaining a level of situational understanding and empathy.
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