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As more patients grapple with high-deductible health plans, more physicians struggle to get paid.
A new study of data from the athenahealth network, published in collaboration with Healthcare Dive, highlights the scope of the problem — and the need for healthcare organizations to rethink their collection protocols.
When patient payments aren't processed at the time of service, the research shows, there is significant risk that those obligations will prove difficult to collect — even when patients return for future appointments.
Indeed, in two out of three visits by patients with outstanding balances, the data reveal, nothing is collected at all.
The analysis examined data from 51,000 providers on the athenahealth network who saw commercially insured patients in 2016. Researchers found that practices overall collect just 12 percent of outstanding balances at the time of service, and collect nothing 67 percent of the time.
They also found — perhaps unsurprisingly — that providers have the most trouble with the biggest unpaid bills: Practices collect 40 percent of outstanding balances when the tab is $35 or less, but just 6 percent of such balances when the patient's debt tops $200.
On average, the data show, practices struggle with nearly $18,000 in outstanding balances per provider per year. They manage to collect just over $2,000 of that potential loss when patients arrive for their subsequent appointments, and recoup much of the rest as clients send in their payments.
But they still wind up taking a serious hit, permanently losing almost $5,000 per provider per year. For low-performing practices, the numbers are far worse: a failure to collect almost $25,000 per provider at the time of service, and an ultimate loss of approximately $8,000 per provider per year.
A strategy for collections
That stark reality has forced many practices to shore up policies around patient obligations. Some high performers on the athenahealth network have built staff protocols and workflows around maximizing collections — even assigning the collections task to unconventional staff, such as schedulers.
At Annapolis Internal Medicine in Maryland, the goal is to collect as much payment as possible upfront, says Yvette Perry, practice manager.
“We used to collect at the check-out desk, and that didn't always work so well," she says. Patients, she explains, would have all kinds of excuses — “my wallet's in the car, I left my checkbook at home" — and on their way out the door would just ask for a mailed statement.
“At that point we'd be relying on them to pay us back, so we never knew what to expect," Perry says.
Perry says the practice has also managed to keep collection rates relatively high by offering payment plans that patients can afford.
“We are willing to work with anyone as long as they stick to the agreement," she says.
Frank Beaman, chief executive officer at Faith Community Hospital in Texas, says his team takes a similar approach with patients — setting up payment plans for those who need them, and even offering cash discounts in certain cases.
In addition, Beaman says, front desk workers are adept at “getting bills out on a timely basis, and making sure that they're accurate so there's nothing to hold them up."
They also review patients' responsibilities prior to their arrival and are trained “to ask politely" for payment upfront.
“That way, when patients come in, everything is pretty much cut and dry: 'Here's what your copay is, here's what you owe. Do you want to pay by credit card, cash, or check?'"
One thing the staff never does, Beaman says, is turn people away because of outstanding bills. “We don't do wallet biopsies before treating patients," he says.
The burden of bad debt
Indeed, the new realities of health insurance design have placed an increasing burden on providers: A previous study of athenahealth data showed that a significant portion of large patient obligations are written off as bad debt. And the challenge of collections is compounded by the fact that, with many high deductible plans, it's difficult to know precisely what is owed at the time of service.
Some economists and health leaders have pointed to the need for policy changes, from making payment reform more attractive to encouraging greater price transparency.
In the meantime, it will be up to individual healthcare organizations to bridge the gap. Perry, for her part, says her practice overall does “really, really well" when it comes to collecting as much as possible.
Whether the bill is big or small, she says, “it's all about setting expectations, and letting the patient know what they owe when they come in."
Once patients understand the charges, she says, “they're usually willing and ready to pay."
Chris Hayhurst is a writer based in Northampton, Massachusetts.