The financial reality of today’s healthcare industry is complex and serious. Bad debt has increased to $129 billion.¹ Many providers are under increasing economic pressures to enhance their financial position in every aspect possible.

But when it comes to collecting money, hospitals are in a challenging position. Many patients perceive healthcare as a right without financial consequences, and thus some providers still view uncompensated care as simply uncollectible. In addition, the growing financial burden is forcing providers to be more sensitive about when and how often uncompensated care is given while continuing to maintain patient goodwill.

The healthcare industry needs to strike a balance between maximizing returns and being patient friendly. This is where many turn to collection agencies for support. The need to educate the healthcare industry on the value and benefits of collection agencies is critical.
Which brings us to the point of this piece: What do collection agencies do and what value do they bring to healthcare providers? More importantly, what should providers do to ensure that they have the right collection agency partner to achieve the best outcome?

Choosing the Right Partner
Although there are thousands of collection agencies operating successfully, not all possess experience and expertise in the healthcare market. Before a collection agency comes onboard, providers should do some due diligence to ensure they partner with an agency that offers the right capabilities and expertise to meet their specific needs.

According to Steve Stewart, COO of H&R Accounts in Illinois, whose client-base consists of hospitals and healthcare organizations, providers should ask and review the following areas before hiring an agency:

• Do they have a demonstrable track record for balancing patient goodwill and returns?
• Do they understand healthcare and the healthcare environment?
• What types of references do they provide and how analogous are they in size, structure, and services?
• Do they possess similar values, philosophy and approach?
• Do they have healthcare industry credentials and certification from such associations as AAHAM, HFMA and ACHE?
• What training do they provide their collectors?
• What type(s) of technology do they use?

Agencies that can effectively address the above questions can complement and expand collection efforts already initiated by hospital staff. Also, they can offer unique advantages and capabilities unavailable to providers to help boost revenue recovery efforts.

Benefit of Collection Agencies
Collection agencies are trained experts in collections. They possess appropriate resources, staff, time and skills to deliver high-level strategies and day-to-day tactics to help patients and providers communicate effectively, resolve a debt or find an appropriate method of reimbursement. This can be accomplished through patient payment or by gathering information to determine the patient’s eligibility for charity or discount care.

Agencies have access to and use leading edge technologies and solutions that increase contact rates with the patient. Collection systems with effective follow up capabilities, account workflow, dialers, and interactive voice response among other features are critical to efficient and effective recovery. Time-intensive tasks are streamlined, redundancies are eliminated, and collectors can do more with less using technologies to complement or replace manual activities. Technology also enables alternative payment options such as payment over the phone or online, which provides patients flexibility. Complex regulatory environments can also be easily navigated through technology assistance.

Most agencies spread the cost of technology across their client-base, enabling clients to benefit from the latest and greatest solutions on the market. Of course, a provider can choose to implement a similar system internally but the cost to purchase, implement and train staff would have to be consumed entirely on its own – not the most cost effective investment for many providers that need immediate assistance and attention to their escalating account receivable debt.

Long-Term Partnership Starts with Common Values and Vision
Bottom line, healthcare debt might be unexpected or unwanted, but services offered must be compensated. Revenue recovery is critical in order for providers to continue their mission. Collection agencies are often able to start a dialogue, evaluate the patient’s financial situation and ability to pay, and help to find a solution that is reasonable to both the patient and the provider.

In an effort to get the most value and benefits out of agency relationships, providers need to do the due diligence to make sure that they have the right firm from the start. An agency that shares a common vision, philosophy and approach combined with skills, technology resources and healthcare experience to meet specific needs will go a long way in fostering a long-term partnership and helping to achieve financial success.

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