Investing (not MONEY) in Patient Experience Can Help Hospital Revenue
The patient experience is a critical factor that sometimes gets ignored in the hospital setting (or maybe not… but it DOES get forgotten). The primary focus of a hospital is to heal the sick and cure the injured. However, hospitals are also businesses interested in not only covering their costs but making a profit as well. As a result, the patient experience has to be kept as a (top) priority.
The patient experience in any other business would be the customer experience - how the customer feels about how a transaction occurred, whether he or she received good service or not, and whether the whole matter was worth the money paid for the help received. The third part doesn't weigh in as much because many people have health insurance, so they don't realize the out of pocket expenses very much until they hit the Medicare years and the problem with the doughnut hole (a period of expense every year that the federal government requires people to pay out of expense before Medicare covers the higher costs).
Here's the important point to always keep in mind with every interaction with a patient - a happy patient means a smoother treatment and visit. Granted, patients aren't much happy to begin with being sick or in pain when they arrive in a hospital. However, when their pain can be alleviated and the treatment includes as much care as possible, it can make a huge difference in how the patient views the hospital when feeling better. And simple things can make a huge difference. Here's some examples how:
"A happy patient means a smoother treatment and visit."
- Doctors who visit a patient but keep one hand on the door handle send a message that they can't get out of a room fast enough. The patient is taking everything in; a doctor who sits down and spends time to understand the issue or problem wins big points with a patient both at the visit and afterwards as well. Doctors are the front line representing a hospital business aside from nurses. If their bedside manner can be improved, it often results in a demand from patients via referrals, which means more business for the hospital.
- Leaving a patient sitting in a hallway on a chair or a bed after check-in is one of the worst things to do. The person feels helpless, sits for hours, and suffers in pain. Simple triaging steps can provide immediate, preliminary care and review before a doctor arrives. Registered nurses can take a huge amount of this work, again improving the perception of the hospitals work when people are in pain.
- Dismissing the suffering of a patient as something the patient is making up and giving him or her a medicine that turns out to be an over-the-counter drugs and nothing more. Once the patient finds out, he or she frequently feels duped and lied to by a doctor. Medical staff need to instead focus on why the patient is feeling pain. It may identify underlying issues that need a different treatment instead of ignoring. That in turn can likely reduce everyone's costs and turn a chronic problem into a success story.
- Making a point to get financial papers in front of a patient just before a major treatment or procedure is about take place. This type of blatant practice to protect the hospital's financial interests is a fast way to get sued for making a patient do something under duress. Instead, waiting for the patient to be ready to leave is the better approach for financial documentation. Patients are more accepting once treated, and they are more likely to pay their bills timely as well.
- Approaching family in the hospital to ascertain next of kin when the patient is facing a serious condition so as to figure out whom to send an invoice to. There is plenty of information online and publicly available for this purpose. There's no need to make family members feel hunted for contact information when visiting a loved one. This should be entirely avoided. If additional contacts are needed to chase down an account later on, the Internet already provides plenty of information for free or low cost, including relatives.
Doing any or all of the above will help patients feel BETTER about their experience, make a hard time a little less difficult, and ultimately, they’ll come back (and maybe even tell a few friends or family members to go!). Working towards making the patient experience positive will often go farther towards an acceptance of treatment as well as cooperation with the hospital's financial needs. The amazing thing about the patient experience is that making it a positive one does not cost millions of dollars in complex software, personnel, contracts or similar. Instead, a huge impact can be made by just changing personnel's behavior towards patients. Doctors, nurses and personnel who can slow down slightly and remember that principle can go a long way towards boosting the patient experience in the right direction.
I’ve been asked the same question time and time again when I'm in the field talking about self-pay collections and bad debt - what question you ask? I'll get there. Collecting invoices from a stubborn or intentionally uncooperative patient for medical services can be enough of a problem, but when the patient seems to have “no money whatsoever” to pay the bill many hospitals and clinics immediately assume the case has to be written off as a loss. That's far from true, but unfortunately it seems like the only logical choice due to a lack of awareness (or wanting to keep the patient from filing a complaint!). In reality, there are a number of ways collections can be made if done in a smart, persistent fashion. There are some accounts that will take a while to get paid, but persistence does often pay off in the end (trust me, I KNOW persistence!) Finally, the question I get asked...
So how do you get a patient to pay who doesn't have money?
Human beings generally don't like to feel guilty about something (you know you feel bad minutes after you yell at your 4 year old for spilling juice everywhere or guilty after you eat 6 cookies instead of stopping after 3). It bugs at them and eventually their mind wants some kind of resolution to make the guilty feeling go away. Take confession for example – it’s a powerful ceremony in some religions, and also the reason why people eventually just give themselves up after doing something very wrong.
With uncollectable medical cases, a patient who has no money immediately available doesn't mean the person should be left alone and forgiven the cost. Consistent reminders, billing letters and phone calls can do quite a bit in convincing a person to pay their bill when they have the means to do so. A surprising majority will eventually try to close the issue with a late payment due to feeling a twinge of guilt. In the meantime, the effort and cost expended with regular communication attempts are relatively cheap - the cost of a letter or a local phone call in most cases.
Early out or collection agencies essentially take over the communication role, leaving a hospital or clinic to put its attention back to business.
Providing Ideas for Finance
Smart healthcare providers or their agencies remind patients of their potential ability to borrow to pay their bills due immediately. By making information available how to obtain loans or the types of financing accepted, medical offices can realize an increase in invoices being paid very quickly. People just need to be reminded that these tools exist.
Advising finance can be a bit tricky; no one wants to be accused of pressuring a patient into some kind of predatory lending scheme. However, if a patient already has access to such tools or can get access, there's no reason why he or she shouldn't be convinced to use them to pay outstanding costs for medical service.
Understanding a Collection in Legal Terms
For a hospital or any party to exercise a collection over a long period of time, the debt needs to be established in court. Otherwise, under general contract law, a medical business only has three years in most states to exercise and enforce a contract for services rendered. After that, the medical loses the power of collection.
When confirmed in court, however, the party confirms the right to legally collect on a bill up to 20 something years later. So even if a person doesn't have money right now, it doesn't mean the patient is automatically off the hook. Waiting a few years can find the same person with a changed situation and the ability to pay the outstanding bill. The accounts receivable just has to be treated like a long-term debt owed versus a short term cash issue.
Garnishments are another legal tool available. Once the court has confirmed a debt is owed, the hospital (or agency) can wait until there's evidence that the patient is working. When that occurs, a motion for garnishment can be made, which then allows the hospital to seize a portion of the person's paycheck. The same general process can be used with a property lien, forcing people to give up value when their property gets sold. Again, however, both take time to implement and see them come to fruition. So offices pursuing patient debts need to be patient and disciplined.
Collecting invoices from a patient who seems like he or she can't pay a medical bill is possible, so offices should not be so quick to write off these accounts as lost. They do take patience, however, and persistence. So if outsourcing, a hospital should make sure the vendor doing the collection work is professional in practice and persistent. After all, every action does have a reaction; a hospital should always think about how its collection efforts play out in the big picture of a community.
The process of outsourcing a hospital’s accounts receivable or any other medical office for that matter, does not start with handing over accounts and waiting to see what happens next. Instead, accounts receivable management starts with a good amount of planning and understanding what benefits A/R outsourcing will provide a hospital in the first place. When accounts are actually transferred for management, the office will already have a clear plan on what to expect as well as how to redirect resources now freed up from managing accounts directly.
Generally, the basic benefits of outsourced accounts receivable management include collections (pre-collections and/or bad debt), customer service (inbound/outbound calls), ensuring account payments are kept on schedule and current, statement generation in some instances, payment processing, and ultimately keeping patients happy instead of antagonistic. However, there are other benefits as well. Understanding how these advantages can manifest then makes the process far easier to implement.
First, a hospital that is growing rapidly needs to be putting its core resources into taking on new patients and generating revenues. Chasing down collections pulls people away from what makes the business grow -- because let's face it, hospitals ARE businesses. Accounts receivable management can free up this part of the business and allow hospitals it to get back to what matters - caring for the patients.
Second, a hospital may need more flexibility and a reduction in its operation expenses. This can happen when a hospital OR medical office needs to make changes rapidly for cash flow benefit. Switching over to an A/R service can reduce in-house resource expenses quickly, especially in payroll. In the meantime cash flow is still coming in at the same level or better.
Third, A/R outsourcing helps a hospital deal with business surges without having to hire more people, increasing operating costs and reducing the benefit of seasonal profit bumps.
Fourth, collections can take an incredible amount of energy and time to chase down. That means time taken away from the business office where new patients and accounts are quickly being generated as well as return business from existing patients. Allowing problem accounts to eat up valuable time is not smart business management, and outsourcing these sorts of issues for collection can avoid a lot of headaches and opportunity loss. Just think about all the time wasted sitting on hold with an insurance company to verify a patient’s coverage – let someone else do that! Hospital’s need to realize that outsourcing isn’t the enemy.
Given an understanding of the above, and how these advantages can be leveraged, a hospital can then engage in the process of implementing an A/R system transfer. This starts with finding and choosing an A/R company who will work as a partner with a hospital versus just being a contractor. It makes a big difference, especially if the A/R outsourcing is expected to be long-time in nature.
Next, new business process planning is going to be necessary. Outsourcing of A/R management is going to be a custom set up in any situation. There is no such thing as a default A/R service package. It’s always different. Each business office (or if there ISN’T a centralized business office, your new partnership could act as the CBO) set-up is customary. So the partnership above will be critical to making the custom design work right.
Finally, A/R accounts should be transferred over in batches to allow a smooth transition. A full switch-over often ends up having hiccups, and the business frequently has delays in cash flow as a result. With a migrated series of account transfers, the outsourced support can adjust to the new workload and nuances, and the hospital can identify anything that needs to be changed or done differently along the way.
As the A/R service settles in and becomes an integrated part of the hospital, ideas and opportunities for improvement and changes will occur. The client office will be smart to capitalize on these opportunities when they come up, finding new ways to generate efficiencies and smart operations. So transferring A/R doesn't end with the first move; accounts receivable management is an ongoing process of improvement for a healthcare provider.
Statistics have it that hospitals actually collect only 30% of patients’ balances with some even collecting less than that.
If you are in charge of your hospital finances you need to know why this is happening and how to fix it.
Hospitals are single-handedly the most difficult to manage institutions in any economy because of their complex organization and the fact health professionals are not expected to be business oriented. Health care professionals in finance and general accounts personnel face various challenges in revenue cycle management and often have to outsource third party medical billing services to cater to their needs. Patient collections after insurance claims have been paid is especially tasking because of the poor strategies geared towards collecting the funds.
Possible Cause #1
One problem your hospital may be facing is the lack of the right accounts receivable representatives to manage the problem. These people are expected to follow up on all your accounts and find out the amount that has been paid, by which patients and the amount yet to be paid. If they slacken in their duties the hospital ends up losing a lot of cash because patients are definitely not going to pay their balances unless pushed a little to do so. Usually, hospital bills are the last thing people think about paying.
Solution: One way to get around this problem is to look for a responsible company that specializes in managing such accounts. The company should be able to keep track of all the finances received on such accounts and maintain proper records for all patients so that loses due to poor management are minimized.
Possible Cause #2
Third party medical billing companies are a great option for revenue cycle management but as it is they are best at managing insurance claims and demographics for hospitals. Once they have done this part they leave out the rest of the work to hospital staff who are probably inexperienced and do not have the time to go after patients with balances. This is where an excellent agency that specializes in A/R comes in. The agency takes up patient collections and ensures that every patient pays some amount if not all of their balance and this will definitely ensure even more than 30 % is collected. Even when the third party medical billing company insists on completing the entire cycle they would still need some level of assistance from outsourcing companies.
Solution: Consider sourcing your medical billing (insurance) claims to one company, and a second for the patient pay responsibility. Yes there will be two vendors to manage, but both should be experts in their respective fields.
Possible Cause #3
Another problem that could be a possible cause of the low patient collections is the lack of proper technology required for the task. The truth is more and more businesses and economic institutions are going digital and hospitals haven’t been left out in this. Your hospital will probably have software for handling finances but once again it will probably fall short of dialer platforms and collection software because third party medical billing companies won’t be interested in them because they are more concerned with insurance claims.
Solution: Outsourcing an A/R agency comes in handy once again because they will have the proper dialer platform needed to get in touch with as many patients as possible. They will also have the appropriate collection software that will make it easy for patients to remit their balances as well as follow up with the hospital on any accounts issues.
Possible Cause #4
There is one more potential problem that could be haunting your hospital and making it lose lots of cash in patient balances; multiple revenue cycles for some patients. This is a common scenario in hospitals because patients come in with different ailments at different times and these cycles could overlap. There is a high likely hood of mix ups and unaccounted for services when this happens so managing all such cycles especially the back end is no easy task.
Solution: One of the best ways to ensure that these aspects are well-accounted is by hiring specialists in the field. For an increase in revenue, patient accounting could hire such specialists internally. However to realize the increase in revenue AND a decrease in expenses, consideration should be given to A/R outsourcing.
Area of Expertise
Healthcare professionals are the best at delivering quality care.
No one knows how to medically treat patients better than healthcare professionals. They are trained in safeguarding a patients’ health and livelihood. However most of them have not been trained in accounting principles, accounting technologies, and revenue cycle management. It is important to maintain this kind of environment for them (experts in their own fields), so it is quite unfair for them to be asked to ensure patients have paid their bills. As a matter of fact, it is painful for any healthcare personnel to fail to treat patients because of bill payment issues, as it goes against everything they stand for. So if you are in charge of finances in your hospital, it is imperative for you work with your team and vendors to get patient pay collections above the 30% standard.
If you are interested in learning how much cash your organization may be leaving on the table, we'd love to help. Contact Us via the web, call us direct: (610) 840-8114, or download our free cost savings worksheet.
What’s one of the best ways to improve your organization’s cash flow? Accelerating and maximizing collection of accounts receivable, of course! In most organizations, increase in the amount of capital to fund investments in technology, people, and training depends on accounts receivable collections.
Up until now, hospitals have been able to fund investments in technology, people, and training without stressing about efficient accounts receivable management. Well, they HAVE stressed about it, but it hasn’t been enough to make a change – at least not until they’ve had to or after it’s too late.
Organizations should adopt systematic means of changing accounts receivable into hard cash quickly and proficiently. Some simple best practices in accounts receivable management include:
1) Timely and Comprehensive Statement Generation
You would think this would be a no-brainer, but some people treat statement generation as an, “I’ll send it when I get to it“ kind of thing. How are patients supposed to pay if they don’t get a statement? Don’t you want a statement every month for your cable, electricity or credit card to see what you spent money on and how much? What if your credit card company sent you a statement in July for charges made in February? Statements should be sent to 100% of the population on time, every time.
2) Representatives with Good Negotiation Skills
You can’t expect patients to pay if you don’t have skilled negotiators on the phone. It’s important for accounts receivable representatives to be polite and professional, but also firm when it comes to negotiations. Good negotiators are able to get patients to agree to pay as much as they can up front or set up reasonable payment plans (in our world, it’s “promises”) to cut collection times in half and speed up cash flow.
3) Timely Follow-Up of Scheduled Events
Prompt follow-up with patients is a must! Collection software is a key tool for building automated queues and reminders. Systems that automatically queue accounts for timely and comprehensive follow-up, dramatically increase the likelihood of successful accounts receivable management. It’s incredibly important that accounts receivable representatives follow-up on patient commitments to get money collected – fast.
4) Alternate Payment Channels
Options need to be given to patients in order for them to pay! You can’t expect everyone to want to pay their bills on the phone. With modern day technology, people are paying for things on the web, ACH, and IVRs. Give. Patients. Multiple. Payment. Options.
5) Alternate Communication Channels
Same goes for communication channels. In today’s society, you have people that think communicating on the phone is old school! It’s important to have not only telephone options, but email, texting, etc as well. We know to be true that people don’t always like to talk to a live person. Creating multifaceted communication channels to talk to patients is crucial in today’s high-tech society!
6) Third Party Leverage
We all know them – they got their statements on time, they got phone calls, but they never pay. For these folks, the ONLY thing that will get them motivated to pay is a consequence like calls from a collection agency. Having a network of collection agencies as a back-end solution is necessary for any successful accounts receivable management process.