Most providers seeking to outsource patient financing
Workforce shortages and staffing churn spurred many to look into outsourcing revenue cycle management and patient collections.
Photo: diego cervo.Getty Images
A majority of healthcare providers, 61%, say they anticipate making greater use of third-party patient financing over the next couple of years, a new survey shows.
CWH Advisors conducted 38 in-depth interviews in the fourth quarter of 2022 with executives at health systems, hospitals and large single/multi-specialty medical groups. All respondents had line or management responsibility for patient payments.
In addition to the providers looking to harness third-party patient financing, 31% of executives are looking for additional financing options. Because of that, CWH predicted that vendors will find providers who are increasingly open to hearing about financing solutions that show real returns on investment.
WHAT'S THE IMPACT
The respondents described a nearly two-year hiatus of normal patient collections protocol as a result of the COVID-19 pandemic. Workforce shortages and staffing churn continue to negatively impact revenue cycle operations and patient collections, they said.
This has spurred many to look into outsourcing revenue cycle management and patient collections in the future.
Only 42% of providers are satisfied with their current patient payments solutions, with respondents claiming a renewed focus on evaluating and deploying third-party technology and services, including text to pay, digital wallet, and card on file.
The likely result, said CWH, is that patients can expect a more retail-like payment experience when interacting with healthcare providers.
While a vendors' proven ability to accelerate cash flow with reduced days outstanding remains the most important buying criteria for providers when selecting a patient payments vendor, 68% cite excellent customer service as one of their top three purchasing considerations. Providers will continue to minimize reputational risk while making investments in a better patient payment experience, surveyors said.
Despite all this, the market for patient payment solutions is highly fragmented and confusing to executives in provider organizations, the survey found. CWH sees this as a clear opportunity for FinTechsor even a traditional player to take the lead in patient payment solutions.
THE LARGER TREND
Collecting patient payments through a vendor may also be attractive in light of an August finding from consulting and technology firm Crowe, which determined that when a patient owes more than $7,500, collectability drops off significantly.
Data through calendar year 2021 uncovered some trends that place greater strains on providers' ability to collect self-pay patient service revenue. And as sudden operational cost pressures – including nursing shortages and higher wages – frustrate hospital financial leaders, an inability to collect all expected revenue further challenges razor-thin operating margins.
One of the leading sources of this net revenue challenge is bad debt – write-offs associated with patient balances that are deemed uncollectible after significant efforts by the provider. Whereas most of the bad debt in the past was attributed to uninsured patients, the majority of bad debt now is associated with patients with insurance, the research showed.
Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com
