Are Your Collections Outsourcers Putting Your Patient Relationships at Risk?
Between 2012 and 2017, hospitals experienced an 88% increase in the amount of revenue coming from patient responsibility. In 2016, total uncompensated care increased by $2.6 billion. According to research conducted by TransUnion, 68% of patients who owe $500 or less, and 99% of those owing $3,000 or more, don’t pay the balance in full.
How do providers protect their bottom line in an era of increasing patient responsibility? Many turn to outsourcers. More than 80% of hospitals report outsourcing at least a portion of their post-service revenue cycle, including accounts receivables and collections.<\p>
While outsources do typically collect more than insourced collections, hospitals need to look beyond just the amount collected to determine the real ROI on outsourcing.
The Value of the Patient Financial Experience
The financial encounter is an increasingly important part of the patient experience, and it goes beyond just asking for co-pays and deductibles up front. How hospitals manage post-discharge billing, and final collections can impact a patient’s propensity to use—or recommend—their facility in the future. This not only effects marketability, but it can also negatively influence a hospital’s HCAHPS scores, which, in turn, impacts their bottom line.
Another consideration many hospitals overlook is the impact of the patient experience on brand equity. A recent article in Becker’s Hospital Review explains that when hospitals emphasize the importance of the patient experience, they can improve brand loyalty and gain a competitive advantage.
Therefore, it is critical that hospitals have full transparency into their outsourcers’ collections practices, specifically regarding patient interactions.
As hard as it may be, it is critical that hospitals hold their vendors accountable for the patient financial experience. In some cases, this may be challenging, especially when the vendor doesn’t have data-driven technology with which to validate success. They may also lack resources to customize patient encounters based on each patient’s unique financial situation. This type of one-size-fits-all collections model can hurt both the ability to collect and the patient experience, as well as the hospital’s reputation.
Accountability Improves Performance
Tift Regional Health System (TRHS), a not-for-profit health system serving 12 counties in South Central Georgia, suspected they were not achieving optimal return on their outsourcing relationships. They engaged Healthfuse, the nation’s first “at-risk” vendor performance management company, to evaluate each vendor and to develop corrective action plans for those that were underperforming. The impact was significant:
- $12.7 million improvement in net collections over 3 years
- $6.5 million in net yield
- $7.6 million in unnecessary account holds identified and released
- 47% increase in self-pay collections equaling $5.6 million over 2 years
- Increase in process compliance from 32% to 76% in the first 18 months with Healthfuse
Outsourcers need to see themselves as an extension of the hospital’s brand. They need to understand the importance of delivering an exceptional patient experience at every encounter. Identifying those that don’t embrace this concept can be challenging. Employing industry experts like Healthfuse can help hospitals enhance the patient experience and achieve an optimal financial return on their outsourcing investment.