3 Strategic Alerts for Financial Leaders

Karen Minich-Pourshadi, for HealthLeaders Media , May 14, 2012

3. Trends in payment. Last week, InstaMed released its 2011 Trends in Healthcare Payments Annual Report. Among the findings are that, with more employers switching to lower-cost, high-deductible plans, "an overall increase in patient responsibility and, consequently, an overall decrease in payer-to-provider payments" has occurred. The report notes that in 2011, payers paid providers only 18% of the billed charges, on average, down from 21% in 2009. Moreover, patient payment now represents 26% of the total provider revenue. Taken to a logical conclusion, that means healthcare organizations stand an even greater risk in the future of not getting paid after a procedure, which will increase bad debt.

Strategic recommendation (or really, two conflicting recommendations): First, collect as much as possible from patients upfront and online. The report notes that in 2011, online patient payments accounted for 12% of the gross dollar volume of all patient payments, up 8% from 2009. Second, tread lightly with collection practices. In light of the recent Minnesota Attorney General's suit against Accretive Health, Inc. for its allegedly aggressive collection practices, CFOs need to impress on everyone involved in collections (internal and external) that mission takes precedence over margin in patient payment collections. Your collections pit bulls may be put to better use on the payer side of the house.

These three reports may not have appeared momentous at first blush, but each can influence your organization's long-term strategy and finances.

Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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