How To Effectively Manage the Growing Patient Portion of Revenue
The patient portion of revenue represents the difference between provider profitability and huge profit losses in today's healthcare economy. While insurance and government agency payments account for a large portion of an organization's yearly revenue stream, rising deductibles and out-of-pocket expenses have pushed patient-responsible portions up to represent a larger percentage of the overall revenue.
Still, healthcare organizations struggle to collect this most crucial portion of revenue.
It's no longer feasible to write off patient payments as uncollected debts. Healthcare organizations need to make substantial improvements in transparency and prioritizing patient payments as a primary revenue stream to eliminate the risk of increasing patient bad debt and profit loss.
Increasing Patient Payments
The idea of increasing patient payments is no longer a long-term goal for better fiscal profitability - it's a necessity in current solvency. Here are a few key points to consider in transforming your collections model to better serve your future organization.
This word has become practically intertwined with patient billing. For good reason: The truth is that transparency is the driving force in securing payment quickly and in better serving healthcare consumer's needs.
In the old model of billing, when patients were billed after insurance had covered their portion, patients often had no knowledge of their projected overall bill. When insurance covered a higher portion, this worked well because the organization didn't rely as heavily on the patient portion for their financial health and patients often had a minimal bill which was not exceptionally taxing to cover.
However, if you use this model today with a patient who may need several visits and none are covered outside of their deductible, the patient may owe hundreds of dollars before they're even billed. This poses a problem for them to pay and it creates a situation where the organization is in jeopardy of not securing payment at all.
In the above mentioned scenario, the largest problem posed is the lack of communication with the patient. It's to their advantage to be billed smaller increments over each visit so they can regularly pay without taxing their own financial needs. Often patients caught off guard with a large bill can feel overwhelmed. For patients, the easiest way to manage their medical expenses is to know the estimated cost in advance and be able to budget accordingly, so they can pay in small increments or prepare for a larger bill.
To make your billing and communication with patients easier and more effective, your organization should use all of the tools at their disposal to better meet these needs. Patient eligibility verification is key so that your patient and the front desk know in advance what the patient portion of payment will be after the insurance pays. Setting payment plans in advance allows for increased transparency and makes it easier to budget. Patients will appreciate the technology you offer that makes their healthcare experience so much more convenient.
Your organization should have a set protocol on payments which patients are aware of and can even be posted at the front desk. You might institute a pay at service policy so that all patients are aware that they need to pay a set amount at the front desk and will come prepared.
Patient collections often represents the most uncomfortable portion of the job in a healthcare organization. The key to successful billing and payment for both staff and patient is in properly training the staff and using all of the tools to better streamline the process for everyone concerned. As the link between patient payments and profitability grows, following this advice will become essential to maintaining a profitable organization.