SAN DIEGO, Dec. 10, 2014 – With high-deductible health plans (HDHPs) on the rise, a majority of CFOs and VPs of Patient Financial Services say patient revenue will be critical to their organization’s financial strategy, according to an exclusive survey about patient pay commissioned by ClearBalance®.
The study showed that 63% of respondents place a high level of importance on collecting patient financial obligations to positively impact their organization’s overarching priorities. “Today most health systems depend on reimbursement revenue from commercial and governmental payers,” says ClearBalance president and CEO Mitch Patridge. “However, that trend is shifting, with patient pay (the balance-after-insurance) becoming an increasingly important component of a health system’s revenue.”
Collecting patient pay is more costly than collecting payer reimbursements, Patridge explains, adding that patient pay collection rates are typically lower than collections from other types of payers. It’s not surprising, then, that 57% of survey respondents believe bad debt from patient pay collections will increase, and at least 40% are willing to consider new tools and methodologies.
As part of its Healthcare Dollars & Sense initiative, HFMA suggests best practice measures for medical account resolution. The recommendations link patient satisfaction with greater success for collections.
“Health systems can make health care more affordable for consumers without sacrificing revenue,” Patridge says. “Consumer-friendly patient loan programs with extended time frames for repayment have proven to keep bad debt in check, boost the system’s financial performance and earn patient good will.”
St. Vincent Health System in Indiana, a member of Ascension Health, the nation’s largest Catholic healthcare system, has used a loan program for 10 years to improve patient satisfaction and increase net collections and operational efficiency. The organization switched from an interest-bearing to interest-free loan program and saw significant performance improvement. “Our loan program contributes to customer satisfaction,” says Phil Skinner, who leads Shared Revenue Cycle Services. “It’s a great service for patients who find it easier to pay larger bills over time without absorbing additional cost.”
Skinner says the organization sees ROI from the ClearBalance patient loan program through operational cost reduction and nearly 20% improvement in payment plan collections. “Most health systems aren’t staffed to manage long-term revolving lines of credit,” Skinner observes. “Yet, offering this type of program is a trend that will continue for health systems that want to appeal to consumers. We know that a consumer-friendly loan is a consideration for patients who choose our facility.”
Other findings from the Patient Pay survey include:
• Outpatient services are expected to become the largest contributor to net patient revenue within five years
• Net patient revenue growth is expected to be 5% or less for most health systems during the next 12 months
• 77% of health systems are experiencing an increase in high deductible healthcare plans, mainly from commercial plans
• The ability to increase cash collections is most important as it relates to the impact on an organization’s borrowing rate
ClearBalance® is the leading provider of consumer-friendly patient loan programs to U.S. hospitals and health systems. Based in San Diego, ClearBalance has served more than 4 million patient accounts at hundreds of healthcare organizations nationwide since 1992. ClearBalance maintains the highest loan repayment rates in the industry. Our healthcare partners are able to significantly improve operating margins by increasing collections. They can also ensure a positive experience for patients who appreciate the ability to affordably repay their direct cost of health care.