As hospital and healthcare industry finance leaders meet the challenges of continued consumerization, streamlining and maximizing patient collections has become increasingly important to future forecasting plans. With over 30% of health industry revenue now a patient responsibility, hospital CFOs responsible for the healthcare payment lifecycle are having to reevaluate priorities and shift established workflows to positively impact their bottom line.
While understanding collection problems faced by hospital CFOs can be subject to variables related to payor and patient mix, location (i.e., urban vs. rural), and institutional mission or mandate (i.e., not-for-profit, charitable), there are some global similarities that can be addressed. Now and in the future, a hospital may record outstanding patient census and quality outcomes but struggle financially without the proper systems in place to manage the self-pay portion of revenue.
Impacting the Collections Process from the Beginning
Healthcare has significantly lagged behind other industries in adopting digital technologies— whether due to cost, security/regulation, or the intricacies involved in implementation. Now the entire sector is in a sprint to catch up—redesigning workflows and adopting and or launching aggressive automation plans. In a recent Black Book Survey, 86% of hospital CFOs surveyed recognize the positive ROI impact of digitization, but only 25% of their transactional work has actually been automated.
With patient responsibility now representing a substantial component of a hospital’s overall payor mix, there are three avenues that should be pursued simultaneously:
- Price Transparency
- Front-End Collections
Implementing Comprehensive Automation That Effectively Supports Collections
Investment in non-clinical technology may often take a back seat, but it is imperative that today’s hospital CFO recognizes the strategic implications of neglecting modernization when technology is changing at hyper speed. Artificial Intelligence (AI), machine learning, and predictive analysis are all being utilized in ways that significantly support the healthcare payment lifecycle overall and the collection process specifically.
While there are always challenges with any new system, increased automation is proving to be cost-effective, reliable, and efficient— providing a direct bottom line ROI through these components:
- Insurance Verification – immediate information on patient coverage and eligibility, co-insurance, remaining deductible, and out-of-pocket maximums. Without it, you risk delaying patient care and increasing your chance of denials during the billing cycle.
- Prior Authorization – AI-leveraged solutions are available with exception handling and emergent support.
- Patient Pay Estimation – real-time information that provides actionable intelligence and AI-driven propensity to pay information to support your front-end collections program.
Consumer Demand for Price Transparency
With a consumer mindset, patients are now demanding price transparency and payment options that require a complete shift of entrenched hospital systems. Hospital CFOs are having to take steps to ensure their system can meet these demands in order to retain patients—including establishing patient portals that integrate with EHR and providing payment solutions that mirror today’s technology-driven world.
Consumers want up front accurate cost estimates that they can rely on as well as a choice of payment options. Many hospitals have taken the proactive stance of partnering with outside loan programs that offer low-interest lines of credit for future patient portions.
Pre-Collections on Estimated Responsibility
As part of a revenue cycle strategy, pre-collections on estimated patient portions is the key to a collections program’s success. Traditionally, collections have been an afterthought handled by a business office well after care has been delivered and usually adversarial in nature. It’s time to move the process up front.
With patient pay estimation technology and AI-driven propensity-to-pay software, financial decisions can be made in real time and appropriate payment solutions offered before the patient enters the hospital. Absent an emergency encounter, your admissions department can be empowered to assess each situation and act as appropriate.
Patient responsibilities are increasing. Shifting the collections responsibility to Admissions will free the finance team to focus on revenue cycle management. Additionally, creative solutions such as prompt-pay discounts and team-based incentive programs can further incentivize accountability and bottom line improvement.
As healthcare delivery and reimbursement responsibility continue to evolve, hospital CFOs are acutely focused on understanding the collection problems they face. With value-based payment, razor thin margins, and insurance payors intent on shifting more and more of healthcare costs to consumers, digital automation will help provide the tools necessary to thrive in the coming years.