The American College of Healthcare Executives has released its annual report on the Top Issues Confronting Hospitals. The top five issues based on a survey of 350 organizations within their membership are:
- Financial Challenges
- Patient Safety and Quality
- Governmental Mandates
- Personnel Shortages
- Patient Satisfaction
Within the financial challenges, the top five areas of concern include:
- Transition from Volume to Value
- Bad Debt (including uncollectable Emergency Department and other charges)
- Increasing costs for staff, supplies, etc.
- Reducing operating costs
- Government funding cuts (other than reduced Medicare/Medicaid reimbursements)
It is worth highlighting – of the top five financial priorities of the average hospital CEO, there is only one that is really actionable by the hospital right away, and that is how they manage and monetize their bad debt.
C&E has invested in further market research, speaking directly to more than 400 hospital executives in the past 12 months. There is a substantial disconnect within healthcare organizations in how they view their bad debt process.
- Director/Vice President Levels – these individuals often own the collection process. This is typically comprised of one or two external vendors providing an early out or later stage collection process. It is concise, and it is relatively clean. In speaking to people in these roles, there is a level of satisfaction and complacency with the current process.
- CFO/CEO – More in touch with the big picture, the average CEO and CFO is not involved on a daily basis with collection and billing processes. They also are more in tune with the harsh financial realities that most healthcare organizations are facing. As a result, they are more willing to look beyond the status quo.
For a very long time, hospitals have dedicated significant resources to optimize their billing and collection practices to large third party payers. Lumped into the catch all phrase of revenue cycle management, providers have enhanced coding (IDC 10 now offers 68,000 options), invested in electronic gateways for e-billing, engaged in process reengineering to streamline workflows, all in an effort to accelerate the cash flow from the larger payers.
Recently, a speaker referred to the Affordable Care Act as the Unaffordable Deductible Act. Regardless of the cause, where one falls on the political spectrum, or how things change at the federal level, the very harsh reality of our current environment is that consumers are now responsible for an larger portion of their healthcare on an out of pocket basis. That means that hospitals are chasing precious revenue from a whole new population of payers, and they are attempting to do it efficiently, a couple of hundred dollars at a time.
Further compounding this issue, hospitals face a variety of challenges when it comes to collection practices among their patient population. They include:
- Brand perception – how strong of a stand does the hospital want to take, for fear that it damages its reputation in a given community
- Compliance – consumer collections can be a challenging business. Privacy concerns, disclosures, HIPPA all create a tangled web that needs to be navigated to collect effectively.
- Technology and Telephony – most hospital business offices do not have the tools nor the technology to manage hundreds or possibly thousands of outbound patient calls or touches to efficiently resolve balances in the $25-$500 range.
C&E firmly believes that the average healthcare provider has taken a very short term approach with management of its receivables in the past. The obvious call to action is to have a receivables management strategy that has debt sale as a timed component that convert these assets to cash. Although hospitals must remain in and continue to serve their community in a compassionate way, they also have a fiduciary responsibility to that community and other stakeholders to be financially viable. Therefore, hospitals that consider themselves as leaders in their sector are engaging with firms such as C&E for the following reasons:
- More efficient management of vendors and processes
- Single accountability for compliance and privacy concerns
- Less operational and financial risk
- Guaranteed financial results
Be best in class and schedule a call with us today to review your receivables (443-371-7894) Office
Business Development Manager