Strategies to Avoid Sending Patients to Medical Debt

If you read our recent blog, Healthcare Provider Strategies to Combat Inflation, it’s no secret that the current economic environment is challenging for providers. However, it’s even more so for patients:

1. High healthcare costs, including high deductibles and copays: US healthcare costs are among the highest in the world, and many patients struggle to afford the high out-of-pocket costs associated with medical treatment even with insurance.

2. Lack of insurance: Many patients are uninsured or underinsured and cannot cover all of their medical expenses. Once the public health emergency from the pandemic expires, there potentially could be 18 million more uninsured or underinsured.

3. Complex billing systems: The healthcare billing system across the ecosystem can be complex and confusing, which can make it difficult for patients to understand their medical bills and pay them in a timely manner.

4. Lack of financial assistance: Many patients are unaware of financial assistance programs that provide philanthropic aid and have difficulty navigating the application process.

In addition to these patient challenges, they can also result in bad optics for the provider. A recent New York Times article showed how pursuing patients for outstanding balances can really damage the reputation of health systems. Another article from NPR showcased how providers can sue patients or threaten their credit and state-by-state policies of these health systems. Additionally, this results in financial toxicity for the patient. Stressing about the ability to pay for medical services can worsen patient outcomes beyond the diagnosis.

It’s very understandable that if health systems don’t pursue reimbursement for services rendered, they will cease to exist. However, there are several steps hospitals can take to improve collections while maintaining their reputation.‍

Help every qualifying patient apply for philanthropic aid

Providers have access to thousands of programs that offer philanthropic aid to patients. Typically, this can be a very manual process which results in few patients receiving the assistance that they need.

However, this entire process can be automated with technology to help as many patients as possible. Technology automatically matches patients to eligible programs and then facilitates the enrollment process to ensure that vulnerable patient populations get the assistance they need and quickly. It’s pretty hard to combat the benevolence of helping patients with philanthropic aid with negative optics, regardless of what the process has been in the past such as sending patients to bad debt.‍

Improve billing, collection and financial assistance practices

Providers should review their billing and collection practices to ensure that they are fair, transparent and consistent. This includes providing patients with detailed billing statements with clear, transparent pricing and working with patients to develop payment plans that are feasible and sustainable.

Additionally, providers should review and update their financial assistance policies to ensure they are clearly communicating to patients that financial assistance is available. This should include helping patients understand their options and assisting with the application process. Information and education should be available in multiple languages to support diverse vulnerable populations.‍

Market internal foundation and CHNA initiatives

Most health systems and hospitals have foundations who support internal needs as well as those of the community. Additionally, not-for-profit hospitals invest heavily in Community Health Needs Assessment (CHNA) strategies which are developed every couple of years to determine the health needs of their local communities. Often, the goodwill and impact of both are not well publicized or recognized by the community. In coordination with the hospital foundation, providers should market and highlight these initiatives and the investment they are making in the community. Not only does this expand the reach of those initiatives and programs but it also creates more visibility about the hospital’s commitment to the local communities and patients they serve.‍

Conclusion‍

The mainstream media has put providers in a difficult spot, highlighting the pressure that is put on collection methods for patients. While some of this pressure may not be fair, providers have the opportunity to improve both operational tactics and optics. It’s important that providers recognize the increasing need to better support patients with their financial responsibility. It’s not only an optics issue, but it also impacts health outcomes. Financial toxicity is real, and the impact of medical bills and the ability to pay directly impacts health outcomes. We have highlighted a number of ways organizations can level up, including the optimization of philanthropic aid, to improve the patient experience and their reputation.