Let’s face it: healthcare policies, programs, and payment methods are complicated. And where there are complications, there are also often extra costs. Extra costs mean bigger and more confusing bills, which patients can easily fail to pay when they are uninsured or don’t have alternative options for paying for the health care that they have received. This is bad news for hospitals everywhere. Despite increased government healthcare offerings in the marketplace, hospitals still lose lots of money each year due to patients’ inability to, deferral of or refusal to pay their hospital fees. This causes bad debt accrual on the part of both patients and hospitals, which in turn brings about a poor revenue stream. That poor revenue stream not only affects hospitals’ operations, but also the quality of care they can give, which in turn affects patients. The entire process becomes a vicious cycle of cause and effect. But fortunately, there are ways to break it, and DECO Recovery Management can help with that.
The Ever-Changing World of Healthcare
We don’t have to tell you that dealing with healthcare changes is annoying, difficult and cost-ineffective. Federal and state governments continue to roll out new regulations and policies or change old ones. This happens especially after important elections when newly-seated lawmakers and administrations make new decisions or overturn existing decisions regarding how healthcare is to be done.
These decisions can cause a lot of undue stress for hospitals. Many hospitals struggle in the first place to get their patients to pay for their care, especially long-term, no matter what insurance coverage they do or don’t have. As a matter of fact, because of these struggles, hospitals of all types have provided more than $620 billion in uncompensated care to their patients since 2000. A way to recover those costs is needed if hospitals are to be able to provide quality and innovative care to their patients.
One thing is for sure, though: when patients have access to healthcare, whether it be through the ACA, Medicare, Medicaid or any other insurance plan, the amount of uncompensated care costs that hospitals have to deal with drops significantly. Of course, not all uncompensated care costs come from a patient’s inability to pay. Some come from financial assistance offered by the hospitals themselves. But in the long run, it’s hard to tell the difference between simple lack of pay and financial assistance, since the same types of patients (i.e. low-income and uninsured) are often involved in both factors. What matters is simply that hospitals need better ways to recover the funds that they are owed for the care provided.
Due to government healthcare policy changes between 2013 and 2015, the uninsured rate fell from 14.5% to 9.4%, a 35% decline. This was good news for hospitals, because it meant they could recoup some of the costs that may otherwise have been lost. Since then, many states, such as Oregon, California, Vermont, Minnesota, Illinois, and West Virginia, have expanded their Medicare and Medicaid offerings. However, these are not statistics that are guaranteed to stay stable.
Other states, however, have put blockages, waivers and restrictions in place which harm the percentage of patients who have access to government-sponsored healthcare. Hospitals suffer as a result because expenses begin to pile up with little hope of being alleviated. Medicaid, the ACA and other government programs do help in these situations. But even with these systems in place, inefficient revenue streams and the lack of communication among patients, hospitals, and government entities tend to mean that funds are unequally distributed to different hospitals. Smaller and more rural hospitals often suffer the consequences of such revenue stream failures, causing their patients to not receive the kind of high quality healthcare that they should.
With the changes in Medicare, Medicaid and the ACA—and in governmental decision-making—continuing to progress, the future is not entirely certain regarding any of these statistics. This makes it all the more important for hospitals to have a way to help their customers figure out how to pay for their healthcare. Communication must improve, in all its forms. Bills and insurance options need to be more transparent and understandable. Patients need to have help putting payment plans in place. Hospital services need to be managed more effectively, and expedited where possible. Creating a better experience will help guide patients in such a way that they can and are more likely to pay their bills. That’s also where DECO comes in. We can sit down with patients and help them to figure out the best way to get the hospital the money it’s owed.
Why Patients Pay or Don’t Pay for Health Care
Just as healthcare plans and policies are complicated, so too are health care costs. For the patient who is ignorant about or inexperienced with handling health care costs, seeing a hospital bill can be confusing and overwhelming. On top of that, customers who do not have insurance often also don’t have good credit, and they begin to rack up debt as hospital bills pile up in increasing amounts. Unfortunately, this also creates more confusion, and the cycle continues.
Patients then commonly have few options to discuss hospital costs with someone, what they mean, and how to go about making plans to pay them. So the bills don’t get paid for a long time, if ever. This arrangement hurts patients and hospitals alike. The patients come to the hospital for their care, but can’t pay out of pocket, and hospitals suffer the consequences. As a result, they cannot innovate or provide better healthcare options. Furthermore, demographically, patients without access to healthcare often cost more money to treat, since lower-income patients tend to be sicker, less educated on health matters and more limited in access to resources that can help maintain their health than higher-income patients. They also require more assistance from professionals such as social workers and translators. These smaller details add up and make for higher-cost hospital bills that are less likely to get paid.
On the other hand, patients who have access to healthcare coverage, the number of which is steadily increasing with expansions in Medicaid, ACA and other government or government-funded programs, are much more able to pay their healthcare costs. This leads to having better credit and better access to loans and other financial assistance. This is positive news for hospitals, because a patient who has an effective means to pay for healthcare is more likely to pay what they owe in full. They’re also more likely to be satisfied with their experience, and they’ll come back if they need to.
Hospitals that aren’t dealing with as many uncompensated healthcare costs are able to do more. They’re able to serve their patients better and create an improved environment of care. In addition, patients who have access to healthcare have lower bills to pay, so not only do hospitals get paid from insurance policies, but they become more likely to get paid whatever the patient still owes out of pocket.
Another factor that affects patients’ ability to pay is rising healthcare costs. Given how quickly these costs are increasing, health insurance is more important than ever for customers to have and understand. But in spite of all options, and based on individual circumstances, many don’t. And oftentimes, there’s no one available to explain a patient’s options to him or her. He or she simply hopes for the best and then goes and incurs debt which takes a long time to pay back, if it ever gets paid back in full. Given that health care debt is a leading cause of bankruptcy, this is a problematic issue for hospitals and patients alike. Plus, given that hospital debt is not even the most common debt that people have, patients’ other debts often take priority. Hospital payment then gets shifted to the back burner.
How DECO Can Help
We at DECO effectively serve as middlemen for hospitals. Our eligibility specialists connect directly with patients in a compassionate and friendly manner to discuss options for health care coverage and make plans for how patients can pay their hospital bills. Not only does this service help the patients, it also helps the hospitals by ensuring that one way or another, patients are able to pay for their care. If patients are uninsured, we will help them figure out the best insurance plan for their needs, oftentimes by helping them get set up with Medicaid or similar programs. We have a 94% standard capture rate, in which our goal is to meet patients referred to us for financial assistance and screen them prior to discharge. During this process, we gather and keep track of their information and help them understand their bills. Then we set up a sensible system by which they can feel confident in their ability to pay their debts.
While it may not sound completely helpful or even ethically reasonable to talk to a patient about how they can pay for the care they are receiving, it is realistically necessary. We have also found that patients are actually more satisfied with their care when they know someone is looking out for them financially. This is especially true when that someone represents the hospital that is treating them. Additionally, transparency about health care policies and costs helps ease patients’ minds, since, as mentioned earlier, such details can be confusing and therefore overwhelming.