Patients across the country are facing increasing deductibles as employers continue to modify their health benefits and use of health insurance exchanges grows.
While we used to classify deductibles above $1,000 as high, we're now seeing individuals with deductibles north of $5,000. The more patients owe, the less likely they are to ultimately pay part, or all, of their obligation.
These industry changes make point-of-service (POS) collections all the more critical for hospital finances. The Advisory Board currently considers POS collections at 1% of net patient revenue (NPR) to be best practice. But, with increasing patient obligations, our experts estimate that best practice will need to be 5% of NPR.
This means that a best-practice 300-bed hospital, which collects $1.7M at the POS today, will need to collect $11.6M in the future.
How do you bridge this $10M gap? I sat down with Advisory Board patient access expert Patrick Kelley to hear how the best-of-the-best are driving patient financial education and collections.
Q: Asking for money at the point of service is new territory for a lot of organizations. How do best-practice institutions set their teams up for success?
A: The best practice organizations I've worked with typically do three things.
First, they make sure their staff members are knowledgeable about what goes into an estimate. They educate their teams on what goes into the cost of a procedure, how it's calculated, and finally, what a patients owes. The front office teams I've worked with have typically been great at collecting the right data and making sure everything is accurate. However, they’re often less well versed in figuring out what a patient will owe.
Second, the best organizations create a culture around collections, from the top down. You can do this by sharing with your team how much money is at stake, or by simply setting expectations that this is a must-do. The moment your staff thinks it's a 'nice to have,' not a 'must have,' is when collections go out the door.
And lastly, top-performing teams put collection goals front and center. They don’t introduce this initiative and then just ignore it. Discuss goals during check-ins with managers. Practice role playing in team meetings or with staff who are struggling. Create campaigns around it. Essentially, stay on top of it just as you would with any other metric.
See how organizations across the country have boosted POS collections
Q: There’s a lot at stake here for hospital finances. What happens if you don’t get this right?
A: If your staff members aren’t motivated, they’re going to collect when it’s convenient. And what we’ve found in health care is that it’s rarely convenient. Often, the patient is too sick or you’re too busy to collect.
So if your staff isn't collecting, dollars are the first thing you lose. If they try to collect, but it’s in an aggressive manner, you're going to lose patient satisfaction. We've found that patients actually do want to know what they have to owe. They don't want the mystery, but they also don’t want to feel like they're just being asked for money.
Q: It sounds like there's a fine line between being assertive enough to collect, while empathetic enough to talk to the patient in the moment. How do you walk that line?
A: Well, the wording here is critical. This is a very new piece of the puzzle, for both patients and staff. And, the right wording can make a patient feel like they're being educated, not just being asked for money. That difference is key to protecting patient satisfaction while improving your collections. Encourage your staff to role play and become more and more comfortable asking for collections up front.
From collections to competition: How to motivate front office staff
Q: Speaking of using the right words, how do best-practice organizations help their patients understand the difference between an up-front estimate and a bill?
A: This is an important question, as we get a lot of pushback on why the estimate changed. It's critical to address this when you're having that financial education conversation with the patient. Take a few moments to walk them through what goes into creating their estimate.
Often, you're giving the patient an estimate and it's five days in advance of the actual procedure. A lot of things can change between the five days before, the day of service, and after.
The procedure can change, or new procedures might be added once the patient sees the physician. Let the patient know that their estimate is based on what's scheduled at the time. Once you walk through it, the factors that could change the exact amount owed will become much clearer to the patient.