As the face of healthcare changes, especially with more people purchasing High Deductible Health Plans (HDHPs), the growing weight of the healthcare financial burden now rests on the patient, which has led to more bills going unpaid. On average, physicians currently collect only $15.77 out of every $100 owed once patient accounts are sent to collections.
The most current medical data shows that in 2016, 68 percent of patients with bills of $500 or less did not pay off their full balance, up from 49 percent just two years prior. Patients who have higher balances usually feel overwhelmed and do not often have reasonable options for repayment. Many times, practices overlook this anxiety because they are too busy trying to meet their financial goals to continue services for all patients.
Because patients are fronting more of the bill, practice models are moving more toward healthcare consumerism and patients expect more value-based care. This means they make their decisions to return to practices (and pay them) based on how they were treated by front office staff, wait times, and the cost of treatment based on their illness.
Between delinquent payments and customer satisfaction, it is important for any medical practice to create a strategy that accommodates patients while also managing the practice’s bottom line.
Customer Service and Collection
It is typical for patients to sign in, wait, visit with nurses and their physician, and then check out with stressful anticipation of the price they have to pay. When they cannot pay up front, they ask for the bill to be mailed to them, hoping they will be able to figure out a way to pay by the time the bill is sent. More times than not, their situation does not change when the bill arrives. The whole experience now creates anxiety for both patients, and practices.
Creating a balance between keeping your practice healthy with on-time, consistent revenue and understanding patient struggles with the cost of healthcare (even if your practice offers reasonable, competitive pricing) can be a tightrope walk. Collections is a complicated, yet necessary, job with typically uncomfortable conversations.
In some cases, if the collections process is too aggressive or too threatening, patients will only double down on their reasons for not paying. This is where threatening collection letters are not going to convince patients already struggling to pay their bill, or pay it any faster. If anything, the threat is counterproductive.
So where does this leave practices when it comes to the bottom line? Make collections more patient-friendly and accommodating while also being more proactive before the patient leaves the office at the time of service.
If a practice does not have a solid collections procedure at hand, a combination of solutions is available. Like any business, patients should be nurtured and assured that the practice is interested in helping them and that payment arrangements can benefit both the practice and the patient.
The best way to create a positive and productive relationship with patients is to convince them that your practice is there to not only help them stay physically healthy, but also financially healthy. Here are a few ways practices can assure patients they are willing to help:
- Address possible treatments and costs up front
- Be able to offer options for autopay
- Offer payment reminders through their smartphones or other devices
- Offer payments that fit within their budget
- If they still fall behind due to unforeseen circumstances, send them letters that offer guidance and make phone calls that offer empathy
Collections Letters and Follow-Up Phone Calls
Collection letters are a traditional way to contact previous and current patients once service has been completed, or somewhere in the middle of a series of visits. A combination of letters and phone calls are common practice, and can be productive if done with care.
Collection letters should have an empathetic tone and explain that the practice wants to help. The following collection letter content is a great way to create an open dialogue with better response and payment results.
- Collection Letter 1: Don’t assume the patient is avoiding payment right from the beginning. When sending the first collection letter, it is good to explain that the payment due date has passed and you would like to remind them that payment is due, and if they have simply forgotten, to please pay as soon as possible. Address the importance of getting current with payments without mentioning collection or delinquency. These are harsh words that feel threatening, especially for a first letter.
- Collection Letter 2: At this point it is probably safe to assume the patient is unable to pay. It doesn’t mean things have to escalate, though. Simply explain that they are overdue on a payment and you would like to help them resolve any issues they are having in making current payments. Unforeseen circumstances happen and there are ways to make arrangements. Make it clear that you can offer real solutions if they simply call.
- Collection Letter 3: If letter 2 did not spark a return call or payment, the third letter should explain to the patient that there is no need to let payments get too far behind. It is still best not to use “delinquent” or “collections.” A simple sentence that says, “Discussing financial hardship or other issues can be difficult and we want you to know that we are here to help. While we can still help you with payment arrangements, we need to discuss what options we can provide.” Instead of leaving a cliffhanger, actually list the options: financing or refinancing, promise to pay, and restructuring the payment plan, for example. Such options give them something to hold on to and they don’t feel like they are being “suckered” into calling for a financial scolding. Even explaining that your practice has helped many patients in similar situations may be an effective way to get them to pick up the phone.
- The Follow-Up Phone Call: So the letters didn’t work, but based on the tone you used in them, you probably have fewer people on the follow-up phone call list. When you call, simply explain you are following up about the last letter sent and you would like to offer a final chance to accommodate their situation, whatever it may be. Be kind, as if you were following up about their next appointment, or how they are feeling after the last visit. Genuine concern goes a long way.
Providing early pricing, walking patients through costs, and gathering information from patients while they are in the office is key to happier patients and successful medical practices. Patient financing can be a way to proactively create confidence in care and more likely to guarantee a patient’s return for future business, which continues their path to health and your path to an increased likelihood of payment.
Still, even after discussions, some patients will fall behind. If they do, the collection letter process that provides empathy and a reminder that the patient has options and your practice is there to help keep them current is a more effective course of action than one that creates fear and anger.
To learn more about how to build a series of collection letters and follow-up calls that get better results with happier patients, download our free guide that walks you through best practices and provides patient letter templates.