Financial executives expressed concern that they must strike a delicate balance between the need to maximize revenue and the heightened scrutiny on hospitals' collection practices. Timothy Reiner, vice president of revenue management at Adventist Health System, in Altamonte Springs, Fla., opened a session on how to select collection agency partners by noting that out-of-pocket costs are growing for consumers, and are expected to accelerate under health insurance exchanges where individuals will be offered a range of plans.
“It's sort of like the Olympics—you can get the gold medal, the silver medal or the bronze medal,” he said. Individuals least able to afford healthcare are likely to choose the “bronze” insurance plans, where they may be responsible for up to 40% of their healthcare costs.
“They probably don't have the $5,000 to $6,000 out of pocket to pay us,” Reiner said. The maximum out-of-pocket payment for the cheapest, or bronze, plans sold on the exchanges will be $5,950 for individuals and $11,900 for families, according to the Kaiser Family Foundation.
A survey from financial services firm Citigroup, which conducted interviews with 50 healthcare executives, found that 85% are in the process of adopting new methods or technologies that address the greater financial responsibility that patients will have. The number of insured people in high-deductible plans—where the patient is responsible for at least the first $1,000 of payments—rose from about 1 million covered lives in 2005 to over 13.5 million in 2012, according to America's Health Insurance Plans, the insurance industry trade group.
Vendors are beginning to offer products aimed at easing the collection process. Citigroup this week introduced Money2 for Health, a tool described as a healthcare “wallet” that aggregates explanations of benefits for patients, and allows them to make online payments to participating providers, speeding up and simplifying the payment process. Its charter members include Parallon Business Solutions, the revenue-cycle management arm of hospital giant HCA, which is piloting the technology in two markets; and health insurer Aetna.
Stuart Hanson, Citigroup's director of healthcare provider solutions, cited data that suggested that 37% of bad debt can be attributed to patient confusion. Yet most of the attention on improving the patient experience has been focused on the clinical side, he said.
“As soon as (patients) walk out the door, (hospitals) lose control of the patient experience,” he said. As a patient, “you might get six, seven, eight bills for what you thought was one encounter. That's not patient-friendly.”
In the session on collection agency partners, revenue-cycle management firms stressed the importance of having a good fit between vendor and provider. “Relationships do count,” said Terry Armstrong, president of State Collection Service. “I say we have to do a better job than the provider does—otherwise why would they outsource it to us?”
The new tools come as some providers are seeing an increase in bad debt related to patients who are unable to pay their rising deductibles and copayments. At the same time, the popularity of high-deductible plans continues to increase among employers.
“We want to increase patient collections irrespective of these market shifts,” Adventist's Reiner said. “We've got to make sure we're treating patients with respect and dignity—but at the same time, we want to collect what they owe."
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