Home » Readers Write » Currently Reading:

Readers Write: An Uncomfortable Truth About Hospital Revenue and an Overlooked Way to Gain It Back

May 10, 2017 Readers Write 4 Comments

An Uncomfortable Truth About Hospital Revenue and an Overlooked Way to Gain It Back
By Crystal Ewing

image

Crystal Ewing is manager of data integrity at ZirMed.

In a video message from last year that he surely never intended for public and regulatory scrutiny, Mayo Clinic CEO John Noseworthy, MD appeared to advise employees to prioritize patients with commercial insurance in order for the famed hospital to remain financially strong.

Months later, Mayo is still explaining exactly what Dr. Noseworthy meant. Many healthcare leaders need no further explanation, even if they personally dislike any suggestion of favoring the commercially insured over Medicare and Medicaid patients. With government reimbursement continuing its decline, most hospitals are straining to hold on to their profitability.

Still, placing hope in commercial insurance to make up the difference is misguided, especially with the rising dominance of health plans that are not only high deductible, but also require high co-payments and high co-insurance. Touted as a means of covering more Americans, these plans often put more of the financial burden on patients than simply paying for healthcare in cash at a discount.

As such, many patients with these plans may claim they have no coverage when it comes time to pay for a procedure or service. It’s hard not to empathize with their motivation for doing so, but it’s a practice that can put the hospital in a precarious position.

With self-pay patients, things become more complicated, especially since there can be a lag of 30 or more days between the time that they are treated and the time the invoice comes due. When faced with a choice between paying for housing, utilities, food for their families, auto repairs, etc. – all of which affect the present and future – or paying a hospital bill for an event that occurred in the past, the decision is easy.

When this thinking is spread across a large patient population, bad debt accumulates quickly. Additionally, patients are unlikely to pay medical bills that are greater than 5 percent of household income, according to the Advisory Board, a consulting firm for hospitals. Median household income in the U.S. is at about $53,000, suggesting that when out-of-pocket charges exceed $2,600 hospitals can forget about collecting, according to Spencer Perlman, an analyst with Height Securities in Washington.

Given the above realities, more hospitals are using automated coverage detection technology, which also finds insurance coverage that patients legitimately aren’t aware of or are unable to communicate. When patients are brought to the hospital in the grips of a heart attack, for example, or while unconscious, they’re hardly able to convey their levels of coverage. Some fully conscious patients even may forget they have coverage, or provide information on secondary rather than primary coverage, or become confused about which carrier covers them. This isn’t uncommon with elderly patients.

No matter the reason it is problematic , it is imperative that coverage verification becomes a more streamlined process at our nation’s hospitals. It can be done in a way that respects the patient and in a timely fashion to protect the hospital’s finances. The most feasible method is to pair automated coverage detection with automated eligibility verification, the latter of which is already in place at many hospitals. However, coverage detection can also be an independent, standalone process. Either way, it makes quick work of checking with thousands of healthcare payers to determine if any are the primary or secondary insurer for a given patient.

Often, as much as 15 percent more instances of billable insurance are uncovered with superior processes and technology. Even just some quick mental calculation can see how this would recoup millions of dollars for many large hospital systems. It’s also significantly over the 1 to 5 percent rate achieved by manual and legacy coverage detection.

Much of this improvement is due to the huge data sets that now power some business intelligence engines, encompassing billions of historical health insurance transactions for millions of Americans. As these insights are tested against a pre-identified set of payers, algorithms can match the key data attributes that confirm coverage and the information needed to file the claim.

What has yet to be quantified but surely exists is the reduction in future collections activity with patients. Despite jargon that describes these patients as “empowered consumers,” the reality is they are struggling to pay their bills and rely on hospitals to help them navigate this uncertain terrain. In turn, hospitals must be fully informed about all of a patient’s sources of payment, including if commercial insurance coverage exists.

There is nothing unethical about seeking such information, only for using it to prioritize patients who it turns out are commercially covered. Clearly hospitals should be setting their sights on treating all patients, regardless of source of payment. The ability to do so is greatly enhanced when hospitals can identify all sources.

View/Print Text Only View/Print Text Only


HIStalk Featured Sponsors

     

Currently there are "4 comments" on this Article:

  1. I’d strongly encourage the author to consider revising this sentence “There is nothing unethical about seeking such information, only for using it to prioritize patients who it turns out are commercially covered. ” I think they mean “it is unethical to use this information to prioritize patients, but it’s perfectly okay to use this information for legitimate purposes to ensure a more financially sustainable hospital.” However, in its current form it doesn’t really say that.

    The irony of the article talking about someone else’s poor word choice at Mayo isn’t lost on me either.

    • PM_from_haities,

      It was clear what she meant in her sentence, hence the fact that you typed exactly what she did only in different words. I’m not sure why you think your way of saying it is better.

      • English isn’t always clear the phrase “only for using it to prioritize patients” could apply to the information or to unethical behavior. Given as the CEO of Mayo indicates, the unethical behavior is standard practice in many institutions it needs clarification.

  2. Unfortunately what many of the vendors that peddle the automated coverage detection programs don’t suggest to hospitals is that there is a growing market of consumers that would rather pay cash to ferret out an honest price for health care services. Thankfully there are for profit entities that understand the economics of demand and will offer their services at a normalized price for those willing to pay cash. What consumer , er patients, really want is a fair price which in many cases must be close to the discounted prices that insurers have negotiated and that hospitals willing accept.







Subscribe to Updates

Search


Loading

Text Ads


Report News and Rumors

No title

Anonymous online form
E-mail
Rumor line: 801.HIT.NEWS

Tweets

Archives

Founding Sponsors


 

Platinum Sponsors


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gold Sponsors


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reader Comments

  • Recovering CIO: No such thing as a "big problem" for anyone in this administration. Given Price's history of stock market deals prior to...
  • @JennHIStalk: "[E]xperts also recommend simple preventive steps, such as taking a break every 20 minutes to stare at an object at leas...
  • Cerner/Epic: I have worked with them before, happy to discuss.......
  • HIT Girl: Athenahealth actually *own* their own private plane, so I'm pretty sure they could have come and picked him up somewhere...
  • Vic Arnold: Looking for information about an IT consulting firm, Softek. We are looking in to moving revenue cycle platforms and und...

RSS Industry Events

  • An error has occurred, which probably means the feed is down. Try again later.

Sponsor Quick Links