The rise of self-pay patients has been a major challenge for hospitals.
In an effort to offset rising healthcare costs, and subsequently, rising premiums, many employers shifted to High Deductible Health Plans (HDHPs), which now account for 81 percent of covered workers insurance plans.1 Not to mention, deductibles have quadrupled since 2003, and the average deductible for single coverage now surpasses the $2000 mark for most Americans at $2120.2
It is certainly difficult to have affordable insurance for an unaffordable product. Nonetheless, hospitals feel the effects of unaffordable healthcare in the form of collections. Consider this - 46 percent of U.S. households must borrow for any emergency costs in excess of $400. Many can’t afford out-of-pocket costs from deductibles, copays and coinsurance, which is partially the reason behind uncompensated care being reported at $35.7 billion in 2015, according to the American Hospital Association. That represents 4.2% of total expenses.
Hospitals do have options to help mitigate and control this disturbing trend. Below are three ways providers can help reduce uncompensated care: create patient financial risk profiles, combat fraud and create more effective back-end collection strategies.
Create patient financial risk profiles
Predictive analytics at pre-registration can create a comprehensive view of the patient’s financial situation. For instance, such analysis draws on multiple external and third-party datasets, which can help hospitals mitigate patient financial risk and find the best financial assistance program for patients.
If third-party data indicates for example, that the patient has undergone a financial hardship and can’t pay, then staff can route that patient directly to financial counseling and find an entitlement or charity care program. Segmenting accounts to differentiate between a patients’ ability and willingness to pay also helps prioritize high yield collections and presumptive charity respectively. This can also significantly enhance account throughput by working with the right patient, with the right person, at the right time.
Combat Fraud
As health care became expensive, fraud and medical theft issues have grown significantly, as the stakes are higher. In fact, fraud costs the health care industry tens of billions of dollars a year, according to the FBI, so combating fraud is another opportunity hospitals can use to help stem their losses. Predictive analysis can also trigger fraud alerts when, for example a patient presents a Social Security number that has been linked to a death certificate. It can also detect red flag alerts and help with compliance audits, enabling medical theft to be identified earlier in the process.
Create More Effective Back-End Collection Strategies
Predictive analysis and automation help make back-end processes more efficient. In particular, automated claims work queue management quickly determines which claims were accepted, denied or are in process.
This type of automated process reduces manual intervention and cost to collect and resolves situations in a timely manner. Patient financial services managers can also drive quality assurance in scheduling and registration processes, which increases the quality of registration data by addressing persistent reasons for claims denials.
Additionally, by leveraging predictive analytics for patient finances, such as community based or soft hit credit ratings, healthcare providers can prioritize accounts for chasing down payments. High scorers for instance don’t need follow-up for 60 days and a tiered system decides who needs follow-up sooner. If the data indicates that a patient is unlikely to pay, then those accounts can be outsourced to collection agencies. Other accounts that reveal a high likelihood of payment can be retained in house, saving expensive collection costs downstream.
Using Data-Driven Strategies to Mitigate Damages
As these examples show, hospitals can help improve their collection methods with data-driven strategies. Such strategies can increase efficiencies, and take a proactive approach to fraud and insights to likelihood of payment. Providers can benefit through worker smarter, not harder, and leveraging powerful data insights to protect revenue form leakage and optimize collections. Harnessing the third party data affords the staff the necessary expertise in this patient as payer environment.
1 Kaiser Family Foundation, https://www.kff.org/report-section/ehbs-2017-summary-of-findings/
2 Kaiser Family Foundation, https://www.kff.org/health-costs/press-release/premiums-for-employer-sponsored-family-health-coverage-rise-slowly-for-sixth-straight-year-up-3-but-averaging-18764-in-2017/
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