In the United States, patients with health insurance are required to pay for a greater portion of their care out of pocket than they ever have in the past. Hospitals and doctor's offices have always been concerned about getting payment from the uninsured, but now that patients with employer coverage bare a greater financial burden, providers are feeling more like debt collectors. By spending time and resources on collections rather than care, providers fear they may fall behind when it comes to outcomes and overall patient satisfaction.
The Root of the Problem
According to a report from CNBC, deductibles for people on their employer's health care plans rose by more than $1,500 in 2018. As a result, millions of patients were responsible for finding thousands of extra dollars to pay for their care. This shift in costs from insurance companies to individuals is a major problem for providers. While collecting insurance claims does come with its own set of problems, obtaining money from individuals is much more difficult. Families have to pay for rent, mortgages, utility bills, clothes, and a variety of other costs that take priority over medical bills.
Collecting from patients is a problem for both small and large providers. Independent offices stated that reimbursement pressures were the main financial pressure for maintaining a small business. Despite payment plans and other programs to help patients pay for care, collections have slowed significantly since the implementation of the ACA. For large providers, high-deductible plans have resulted in hundreds of millions of dollars in lost revenue, and refocusing collection systems takes a lot of time and resources.
Changing the Ways Bills Are Processed
Both independent offices and major healthcare networks exacerbate their collection problems by using archaic billing systems. For many years, revenue was maximized by optimizing claims from insurance companies and reducing the costs of care given to the uninsured. In an era where deductibles were relatively low, getting money directly from patients wasn't considered a top priority. Many providers are simply not equipped with the resources to handle this new type of collection effort, and their revenue cycles suffer.
A labyrinth of medical records, billing statements, insurance companies, and contractors make it very difficult for providers to get current information about what their patients owe or can expect to owe. This problem can be so costly for small practices that many independent doctors have decided to join large provider networks. Since the year 2000, the number of independent physicians has shrunk both in raw numbers and as a percentage of overall doctors. Of those doctors that remain independent, many are turning to third party collectors for help.
In order to deal with this revenue problem, hospitals and other providers are investing in programs that educate patients about how much they owe at the point of care. When patients can clearly see exactly what they're paying for and how they're benefiting, they are more likely to make a payment. While many larger organizations have the funds to invest in these types of programs, smaller offices may not. That's why another possible solution to this problem is to outsource patient bills to a third party collectors. These agencies specialize in forming transparent and trustworthy relationships with patients that result in increased revenue for the provider. They also give doctors the freedom to focus on what they do best. Outsourcing agencies work closely with providers to ensure a continuity of service with patients.
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