If you struggle with getting your patients to pay their bills, don’t worry -- you’re not alone. The average healthcare provider only collects 17 cents on the dollar when resolving patient balances. But if you think it's just that your patients can't afford their bills, you may be missing the full story.
A McKinsey study found that "74 percent of insured consumers indicated they are both able and willing to pay their out-of-pocket medical expenses up to $1,000 per year.”
So why aren’t patients paying us?
I’ve spoken to hundreds of patients who haven’t paid their bills and yes, some of the reasons are creative - even humorous. I've heard everything from people who didn't like the color of the wallpaper in the doctor’s office, or those who thought it was annoying that the receptionist chomped her gum, or the patient who just moved from Canada and didn't realize their healthcare wasn't covered.
But there were a few themes that kept consistently coming up:
1. The patient didn't receive or realize that they had the bill in the first place.
Providers often assume that once a statement has been mailed, the patient will immediately view and respond to it. However, if your patient population is on the younger side, there's a pretty good likelihood that they don't check their mailbox frequently, or that their bill is sandwiched between promotional magazines and spam letters they'll never read. But millennials check their smartphones 43 times a day on average, so that's the place to reach them if you really want your bill to be seen.
Sometimes, the bill hasn't even made it to their home. Patients are often filling out paperwork quickly while they’re waiting and can easily miss a line or mess up their address information. Or if they've moved recently, they may not remember to update their address with each doctor's office. Registration plays a key role in patient billing and collections. Providers need to make sure they are capturing as much valid patient information as possible.
2. The patient didn't understand the bill.
People are unlikely to fork over their hard-earned money if they don't understand where it is going. And good luck finding anyone -- even trained professionals -- who doesn't find medical bills completely confusing. It's not uncommon to have one visit split up into multiple bills -- covering the doctor, the facility, the lab, even the anesthesia professional.
On top of that, high deductible health plans have increased both confusion and costs for patients. Patients know they've been paying their monthly premiums and then are baffled to find that there are also out-of-pocket expenses for a procedure. Even if they have the financial means, it doesn't mean they are prepared to pay a bill that they don't understand. We've spoken to many affluent patients with payment issues and heard the same motif repeatedly: they didn't understand the bill, and they didn't understand what insurance was supposed to cover.
3. The patient was offered limited payment options.
For providers, sometimes getting a little money is better than getting no money. As one said to us recently, “obviously, we are looking to collect on the full bill. But in certain situations, it’s just not feasible. In those cases, we’d happily receive a portion of the bill instead of nothing.”
Allowing your patients to use payment plans and offering discounts could dramatically increase the amount you are able to collect. Make sure to utilize the new functions that your Practice Management System and Electronic Health Record have. There are also great collection tools in the market that can really give you a leg up.
And with a few small improvements, you can materially increase your bottom line. Of course, there will always be individuals who will not pay their balances, even with the most effective billing operation. However, the more that you can keep out of the collections agency process, the more you can avoid paying large collections fees and potentially harming the trust you've built with your patients.
MedPilot can help you tackle these 3 common concerns, and better your relationship with your patients in the process. Reach out to me for a free consultation and we can figure out how to make patient billing and collections a more profitable aspect of your company.
(619) 840 - 7366