5 much better ways to collect patient debt
We tend to be creatures of habit, often settling into routines we don't reassess until something jarring occurs to them or our lives.
It seems perfectly reasonable that highly educated professionals with advanced degrees in hospital or business administration want to be proactive about collecting unpaid bills. They have been relentlessly educated about not leaving money on the table. In an era of reduced payments from public and private payers, collecting every little bit helps.
But hospital patients didn't buy a flat-screen television from you; most sought care because they had no other choice. And unlike the neighborhood Best Buy, there is likely not a single price for a single procedure posted anywhere in your institution.
In such an environment, dunning and then suing patients with low incomes and few resources to respond is extraordinarily short-sighted, if not mean-spirited.
As a result, providers become something to be avoided by patients at all costs. When they're finally carted into a hospital with a minor infection that became septicemia because they avoided getting proper care, you'll then be providing services worth hundreds of thousands of dollars. And they won't be able to pay you for that, either.
So, here are five proposals for hospital finance executives to proactively focus on improving the patient debt collections process:
1. Don't charge an uninsured patient more than 150 percent of Medicare. Period.
Hospitals have made it impossible to inform a patient of what their care will cost in advance, eliminating all chances they have to properly negotiate. They then get utterly gobsmacked by bills far higher than what Medicare or a private insurer have paid. Placing a cap at 150 percent of Medicare for all charges will result in a much more reasonable bill--one that a patient is much more likely to agree to pay off in installments. And if the occasional patient is smart enough to make an even lower offer, the hospital still has room to negotiate. After all, if revenue at Medicare levels is what keeps a hospital in business, it is therefore a fair and reasonable charge level for services rendered. Accepting it from some individual patients isn't going to hurt the big picture.
2. Start listing your prices. Immediately.
Every one of your patients who walks into your emergency room regularly enters McDonald's or some other retailer and has dozens of prices for popular products placed immediately in their sight line. It is now time to get on the ball, work with your contracted providers and figure out what the most common procedures in the ER cost. Then post those prices (at 150 percent of Medicare) on the ER waiting room wall. Believe me, your uncompensated care costs will drop dramatically. And your ER patients will be grateful they'll have something to look at other than an aging television set blaring a rerun of "Cops."
3. Don't sue. Ever.
If there is some sort of victory hospitals gain by suing their patients, it is Pyrrhic at best. Being at the business end of a lawsuit is perhaps the most stressful thing an individual has to face in their lives. If that person is poor or uneducated, they are simply going to crawl into a corner and pray it goes away. Garnisheeing wages or placing liens on property is not the business you're in, so don't jump onto that tangent. And should the patient's circumstances improve and they get insurance in the future, what are the chances they will ever want to use your hospital again? It's not worth it. So don't pursue it.
4. Don't report to credit agencies. Ever.
As I said before, obtaining healthcare services is not an impulse buy or a timeshare someone doesn't need. Elective procedures, like plastic surgery, all are cash pay in advance anyway, so there is little chance that a patient is deliberately gaming the system. You're in the business of healing your patients, not wounding their credit. So stay out of that game.
5. Retrain and expand your social worker staff. Yesterday.
Social workers may prove the most valuable non-clinical commodity you have in your hospital. They're great buffers for people who have suffered the losses of loved ones or against the occasional snarling narcissist who also happens to be a cardiac surgeon. If you remember from your MBA days the term "goodwill," you know what I'm talking about. Train every single one of your social workers to determine how much an uninsured patient and their household earns, and whether they can apply for state or local insurance programs. If not, anyone who earns up to 400 percent of the poverty line should be immediately eligible for your charity care program, and encouraged to apply--immediately. Don't have enough social workers to pull that off? Hire more. Based on what was going on at Fairview Health Services in Minneapolis, I'm guessing they're much more pleasant to have around than those metaphorical legbreakers from Accretive Health. - Ron (@FierceHealth)