John Oliver Segment on Debt Shows Importance of Collecting Early
This week, healthcare debt made the news in a big way.
John Oliver, host of the HBO show “Last Week Tonight,” out-Oprahed Oprah with a giveaway worth nearly $15 million dollars, by far the largest in television history. He set this record as a climactic moment in a segment exposing the problems with consumer debt - particularly healthcare debt, which is 38 percent of debt collected in the United States, according to The Atlantic.
Oliver set up his own debt collection agency for just $50, then bought a debt portfolio worth nearly $15,000,000. His cost: less than $60,000, well less than a penny per dollar of actual medical debt.
“Instead of collecting on the money, why not forgive it?” Oliver asked.
The comedian and television host turned the debt over to a nonprofit called RIP Medical Debt that seeks and forgives distressed debt. They’ll be contacting the 9,000 people whose debt Oliver forgave on his show.
Much of the United States’ debt is healthcare debt. According to NerdWallet, medical debt affects 1 in 5 Americans, and third-party debt collectors collect $21 billion in healthcare debt each year.
Large debt collection companies buy debt from businesses that have lost hope on their chances of collecting, and written off the debt as a loss on their taxes. Companies are able to continually sell debt to other companies, which means personal information can transfer from company to company and companies may continue trying to contact consumers for years to come, dragging out the collections process for those who may not be able to pay.
As a recent McKesson study has shown (and most healthcare providers know from experience), the longer you wait to bill patients and collect patient payments, the harder a time you’ll have ever getting paid what you’re owed.
The best practices to counteract the bad debt cycle, and to avoid letting debt get to the point where it’s written off and essentially worthless, involve providers and ambulatory centers implementing proactive strategies to securing payments early on. Collect more by:
Verifying Patient Eligibility
Just as you wouldn’t sell, say, a car to someone who can’t afford it, you want to make sure a patient is covered by insurance and will able to pay for your medical services. Healthcare consumerism means treating patients like consumers in other fields.
Providing an Estimate
Nerdwallet found that 63% of Americans received a bill that was more than they expected to pay, while more than 80% prefer to get an estimate up front. Eliminate surprise by letting patients know what to expect, and you’ll be able to collect more.
Storing Credit Card Information on File
It’s a no-brainer for practices to get necessary payment information at the beginning of the visit, setting themselves up for collecting the responsibility later.. Ensure payment security by letting patients provide credit card information up front, and it’ll be easier to charge patients once you bill.
Billing more quickly
As we mentioned earlier, the correlation between early billing and successful collection is significant. The quicker you bill patients, the more likely you are to collect.
Oliver’s humorous take on the difficulties in collecting consumer debt is both poignant and far-reaching. Between YouTube and Facebook, the video was viewed over 7 million times - while countless more watched on television, or streamed from HBO Go or on other websites.
This raised national awareness is a great opportunity to highlight the ridiculousness of the debt collection cycle, and remind providers of the importance of collecting patient payments early - before they may not be able to collect at all.