Increasing patient accountability for the cost of healthcare means physician practices likely will need
to improve their internal collection processes and consider contracting with an outside collection agency. But choosing a good collection agency is the second priority. The first is establishing well-thought-out and specific internal procedures for collecting as much as possible before turning to an outside collection agency.
We are seeing our clients turn to collection agencies more often now than ever over the past 30 years.
From the 1980s through just a few years ago there was far less patient responsibility involved with the cost of healthcare, because most of the cost was covered by the insurance providers.
Now, however, almost half of all coverage is provided under high- deductible health plans (HDHPs) with the patient responsible for the first several thousand dollars of expense. This patient responsibility portion of the cost is where delinquency and bad debt occurs.
The processes used when coverage was primarily under health maintenance and preferred provider organizations are not adequate in the world of HDHPs. Now, instead of $20 to $50 copays for routine encounters, the patient’s responsibility is often 3 to 10 times that amount, or even more when it involves procedures.
To add to the problem, doctors’ practices typically are not very good at discussing finances with patients. This wasn’t the case before the widespread use of managed care and copays. When coverage was provided under indemnity plans, patients were primarily responsible for the cost of ambulatory care and were accustomed to paying for the services they received, just like purchasing other goods and services. Managed care essentially pushed the matter of cost out of sight since the party paying for the care was not the one rendering the service or receiving the care. And that which is out of sight tends to be out of mind.
Consequently, most doctors and practice staff members today have not had to address finances with patients to any meaningful extent. Like most things in life, if you don’t have to deal with something, you don’t develop the behaviors important to the activity.