Insured-patient cost-sharing, which includes deductibles, co-insurance and co-pays will grow 40 percent over the next five years, Accenture analysis found. Given the complexity of collecting patient payments, providers will likely face substantial increases in insured bad debt. Consequently, companies need to adjust their payment and collections strategies to handle complex liabilities.
The ACA is boosting insured patient rolls, and according to the Congressional Budget Office, the number of uninsured will drop by more than 25 percent over the next five years.
However, Accenture found that this rise in insured patient cost-sharing will significantly outweigh the benefits of having fewer uninsured patients. The main problem involves the increasing share of their healthcare bills that patients must pay out of pocket.VIEW ARTICLE [PDF]
Accenture analysis suggests that insured patient cost sharing, which includes deductibles, co-insurance and co-pays, will increase 40 percent over the next five years. Collecting these funds from patients will be a challenge, with significant amounts becoming bad debts.
To put it into perspective, a provider with $1 billion in net annual revenues could experience a $27 million increase in insured patient cost sharing over the next five years. Because patients are less likely to pay healthcare bills immediately compared to payers, providers that fail to adjust their collection methods to deal with this new reality could quickly find themselves facing toxic levels of bad debt.VIEW ARTICLE [PDF]
Accenture analysis found that uninsured bad debt could decline by as much as 26 percent, due to the ACA. At the same time, however, insured bad debt could rise by 39 percent—a 20 percent increase in net bad debt overall. For a provider organization with $1 billion in net annual revenues, that could amount to more than 5 percent of net revenue, or $51 million.
Accenture also identified a strong upside for providers that deal proactively with patient cost sharing. Companies that adjust their payment and collections strategies could boost their total net revenues by more than 0.5 percent, or $5 million for every $1 billion in net revenue.VIEW ARTICLE [PDF]
Providers need to adjust their payment and collections strategies, which will mean greater healthcare pricing transparency and patient engagement. Effective collection requires the up-front identification, communication and collection of liabilities and the support of a comprehensive set of strategies, resources and tools.
Several effective payment strategies exist for this situation. Providers should focus on complex liabilities, concentrating on complicated payment areas like deductibles and coinsurance instead of solely pursuing simpler up-front collections strategies such as co-payments.
They should also expand their financial counseling capabilities in order to educate and assist patients. Another strategy involves establishing strong customer relationship skills, which is currently an underappreciated area in the industry.VIEW ARTICLE [PDF]