Tom Furr

	With startling serendipity, a month to the day after the ACHA passed out of the House, 

 joined Aetna, Cigna and Humana in quitting the ACA health plan marketplaces in Ohio. The very next day, 

 opted to end participation in two counties in Washington state, adding another region of the country poised to be without coverage through the ACA. 

Blue Cross and Blue Shield of Kansas City

 is also planning exits impacting some 25 counties in western Missouri.

Both political parties are responsible for healthcare disaster

	And now that we’ve seen what’s in the Republican’s senate healthcare bill, it’s unlikely those health insurers will reverse their business-driven decisions. In the process, the  problems for individuals and families with coverage through an ACA marketplace will get worse in all probability. What’s more, those who have employer-provided health plans are contending with their own set of healthcare-related troubles.

, 83% of workers who are getting some form of coverage through their employers have plans with deductibles. That dollar amount has gone up nearly 50% in the last five years. Data from the 

Centers for Disease Control and Prevention

 show one quarter of those covered have high-deductible health plans (HDHPs), and most anticipate this form of policy will soon become the standard. 

, a medical market research firm, noted recently that Americans will be shelling out a stunning $608 billion from their own pockets by 2019.

	Congress’ absence of collaborative behavior on healthcare legislation, fewer insurance choices from fewer health plans and skyrocketing patient out-of-pocket expenses should set off alarms in your head to take swift action to ensure the financial health of your medical group.

Physicians: Your fate lies in the hands of one of your own

	If you are waiting for our elected officials in Washington, D.C., to save the day, you might be in for a rude awakening soon. The situation you’re facing will only get more severe. Regardless of what healthcare law eventually gets signed at 1600 Pennsylvania Avenue, HDHPs will become more prevalent as all market dynamics point to that being the case. By extension, the amount of financial responsibility sitting with the patient will most certainly increase. Today we’re seeing 20%, 30% or as much as 50% of a medical group’s revenue coming from patients.

	In challenging times, the business-and, make no mistake, your medical group is a business-that succeeds is the one that tosses off the status quo and embraces new, better and more efficient ways to do things.

Next: 'Then there’s the statement itself'

	To begin with, look at the way you seek payment for services rendered. The Healthcare Financial Management Association (

) suggests the rise of patient financial responsibility calls for a “modern billing approach.” I’ve visited countless business offices of all sorts of medical groups across America. “Modern” is not the word I’d use to describe the patient payment collection methods used by most. In this digital age and the ubiquity of mobile phones, nearly nine out of 10 healthcare bills go out from medical group offices in 

 form. In contrast, 56% of all bills presented to Americans are 

	The methods used by retailers and utilities to secure payments from their customers are readily available for you to collect from yours. In addition, you should also look to bill electronically to collect more, reducing significantly the 

 created by paper statements and the cost to collect.

	But let’s start the collection process before the patient enters the exam room. Time-of-service collection methods are cropping up in medical groups, and for good reason. You can get some portion of the patient’s expected financial obligation immediately to aid cash flow and better manage account receivables. And, if you have an electronic billing capability, the remaining balance can be quickly and easily moved to a digital bill.

Everything doctors need to know about Senate Obamacare repeal bill

	Whether a patient has or doesn’t have insurance, the cash outlay for your treatment may force a patient to choose between paying you or properly feeding their children. Yes, that’s stark but it’s the world some of your patients live in. So give them options as to how they can pay. By offering payment plans, you’re extending the empathy and care shown during treatment to the often and unnecessarily awkward collection process. Here too, systems abound to let you automatically integrate payment plans into an electronic billing process without having to manually call and process these payments each month.

	Then there’s the statement itself. Human behavior is such that if one doesn’t understand a bill, it won’t get paid. Far too many medical groups send out statements that are utterly confusing, especially when attempts are made to align charges with an insurer’s Explanation of Benefits. Again, it does not have to be this way. You can provide patients with statements that provide that alignment and clarity

Next: Importance of customer-friendly staff

	And lastly, you need to instill in your front desk and back office staff the sense that they are as much a part of the patient experience as any of their colleagues dressed in scrub suits or lab coats. They are crucial to the collection process. A truly “customer-friendly” attitude is necessary, blended with clear, concise communications that serve to make patients aware of their financial obligations and willing to fulfill them.

	It is foolish to depend on Congress to eliminate the financial trials and tribulations with which your medical group is contending. Still, I suggest you heed with words of a statesman from ancient Roman, Marcus Porcius Cato: “He who hesitates is lost.”

Tom Furr founded Durham, North Carolina-based PatientPay, the patient payment solutions company that offers a patented online billing, collection and reconciliation services that can be embedded in all current popular management and healthcare information systems, to enhance the productivity and profitability of medical practices, ambulatory networks and hospital systems. 

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Now that we’ve seen what’s in the Republican’s senate healthcare bill, it’s unlikely health insurers will reverse their business-driven decisions.

Waiting on Congress to fix healthcare could be hazardous to physicians

 steady rise of consumerism in healthcare

. Far more than an emerging trend, it is now something that will dramatically alter the U.S. 

	The changes that have occurred thus far are likely to pick up speed, in part because of who will be working for the White House. Trump’s choice for Secretary of Health & Human Services, Tom Price, MD, is a supporter of consumer-centric health plans. Further, Vice President Mike Pence brings with him experience as governor of Indiana where he oversaw the implementation of consumer-centric healthcare policies. Adding to that, Pence’s health plan architect was Seema Verma, who’s been tapped to head the 

Centers for Medicare & Medicaid Services (CMS).

	The essentials of consumer-centric healthcare include empowering the patient to make choices, be involved in the decision-making process for her/his care and, it should be emphasized, understand what the costs are upfront by way of transparent pricing and candid conversation.

	The driver behind this consumerism is the emergence of high-deductible health plans (HDHP). Back in the day, a patient’s financial responsibility for their healthcare was often a single digit percentage of the cost, if that. Now, with HDHPs, a patient is confronted with 30% to 50% of the financial responsibility for their care.

	It is simplistic to label high deductibles as the villain. At the heart of Indiana’s Healthy Indiana Plan (HIP 2.0) for Medicaid patients, is an HDHP along with a health savings account (HSA) that is built by plan members paying 2% of their income into it each month, along with subsidies from the state. Until their deductibles are reached, patient payments can be made from the HSA. On the surface, this is pretty standard stuff. Interestingly, a report issued in July 2016 by the 

	â      Reduce the number of uninsured low-income Indiana residents and increase access to healthcare services

	â      Promote personal health responsibility

	â      Promote disease prevention and health to achieve better health outcomes

	Along with those accomplishments, the study found plan member satisfaction rates were high, with 80% indicating they were satisfied with the program. These members also engaged with their healthcare process. For example, 42% checked the balances in their accounts every month and 27% asked providers about the cost of care. Just 1% to 2% of members missed an appointment because of cost. Lastly, Indiana reported that a varying co-payment feature for emergency department use resulted in fewer inappropriate uses of emergency services as compared to the traditional Medicaid benefit.

Next: All too often, attention is placed on the clinical side of healthcare

	The point of highlighting the Indiana experience is to show that consumer-centric healthcare must be a true, balanced collaboration involving the health plan (or insurer), the medical group and, of course, the patient.

How did Medicare become the highest paying carrier?

	Everyone needs to make smart decisions as it regards the actual health of the patient and the business health of healthcare.

	Regardless of the health plan, medical groups are seeing a greater portion of the financial obligation as the patient’s responsibility. Unlike the process of filing claims with insurance companies and getting paid every couple of weeks, collecting from patients is a real challenge.

	It costs more, and takes more time to collect, as many aspects of patient billing woefully underutilize information technology and digital communications like email. Remarkably, nearly 

healthcare bills issued by medical groups in the U.S. is in paper form and sent through the U.S. Postal Service. However, from a medical group perspective, this results in a payment cycle of 90 to 120 days or more, plus the total cost of sending these statements is incurred regardless of whether payment is remitted. That’s inefficiency that directly affects a medical group’s cash flow, hampering its ability to operate profitably and, perhaps, charge less.

	All too often, attention is placed on the clinical side of healthcare. Granted, that’s done for good reason as positive, enhanced outcomes are what healthcare professionals strive for each day. Nonetheless, consumer-centric healthcare will create competitive forces in the marketplace that will demand that providers become more efficient in their business practices as well, in part by employing low-cost, high-quality technologies.

	Anyone who thinks this can wait is wrong. Healthcare is consuming more of the U.S. economy than ever before. CMS notes “the delta between healthcare spending and GDP growth reached a six-year high in 2015,” representing 17.8% of GDP. It estimates that healthcare will total 20.1% of the economy by 2025.

	William Blair, an investment house that concentrates on the healthcare industry, offers the 

 that “...recent healthcare reform legislation-while having positive attributes-does little to fundamentally alter the broken, siloed care delivery system in the United States. Similarly, we believe the law [ACA] does little to control healthcare expenditures. Rather, the legislation focuses on expanding health insurance coverage-a noble goal, but one that falls short of solving the underlying quality and cost issues that drove such a high level of uninsured individuals to begin with.

	While digital interactions between provider and patient are moving “in the right direction,” according to the American Hospital Association, it is seen by William Blair as “still short of ubiquitous.” Interestingly, most of that digital interaction centers on patients looking up medical records online.

Apple looks to expand healthcare presence

	In its report, the firm suggests there is “still room to grow the trend of hospitals moving more administrative functions online.” Shifting patient billing from paper to electronic is just one area that can realize meaningful savings as well as provide a better experience for the patient. It should not seem surprising that 70% of healthcare consumers surveyed by 

would prefer to get their bills electronically. But as I noted earlier, 87% of all medical bills go out in paper form.

	The Centers for Disease Control and Prevention (CDC) 

 claims 39% of Americans under 65 years of age are currently enrolled in an HDHP. That means much of the cost of healthcare comes out of their pockets and is expected to reach 

. The CDC suggests consumers will make better healthcare decisions and healthier lifestyle choices when it’s their money.

	While that logic is tough to take issue with, it represents one element, albeit a critical one, of the equation that can result in better healthcare that costs less.

Tom Furr founded Durham, North Carolina-based PatientPay, the patient payment solutions company that offers a patented online billing, collection and reconciliation services that can be embedded in all current popular management and healthcare information systems, to enhance the productivity and profitability of medical practices, ambulatory networks, and hospital systems.

For over a decade, we have seen the steady rise of consumerism in healthcare. Far more than an emerging trend, it is now something that will dramatically alter the U.S. healthcare delivery system...for the better.

The key to understanding consumer-centric healthcare

	You’re sitting in an exam room with a patient who’s been with you for years. There have been a wide assortment of maladies addressed over that time. And, to the delight of both you and your patient, the outcome has always been successful. From all outward appearances this looks to be a superb relationship. You understand him. He trusts you; even recommends you to folks he knows.

Tips for physicians to earn secondary incomes

	But now this patient asks you how much something will cost as he recently switched to

and the initial dollars are now coming out of his own pocket. Your conversations have evolved from discussing just clinical issues to costs. I strongly suspect most providers can’t answer cost questions as well as they can clinical issues and, more importantly, don’t want to answer since they see it as the job of administrative staff.

	The Kaiser Family Foundation reports in its 

 that the average insurance premium for a family covered by health plans offered by employers rose just 3% this year. This is actually a slowing of the rise of premiums for such insurance coverage, which is the biggest source of health coverage in the United States.

	However, Kaiser also found that the average deductible for such plans rose 12 % in 2016. The survey also found that the average deductible is now above $2,000. It noted that deductibles are rising much faster than premiums, almost six times faster than wages.

	The Foundation’s study suggests that Americans are seeing a shift from “what is comprehensive coverage to what is skimpier coverage, with more skin in the game for workers.” It adds that despite all the arguments about the ACA, there is no evidence that the healthcare reform law is pushing up premiums in the employer-based insurance market.

Could your family live on $50K a year if you died?

	The world you’ve lived in is fading quickly. Gone are the days when all you concerned yourself with was making sure your front desk 

and deposited checks from the insurer that covered 90% of your charges.

Next: "A key point to dwell on is the aspect of understandability"

	Today 30 to 50% of the financial obligation -- the money owed you -- sits with the patient. And when he has a deductible than can easily be as much as $6,000, there’s a high likelihood collecting money owed will take lots of time and cost you lots of money to get it.

	Unlike insurance companies and Medicare, who process and pay promptly, healthcare consumers are far more reticent to pay quickly. It has little, if anything, to do with you as a medical professional or person. Your patients have other obligations they’re more inclined to act on more quickly. If they don’t pay the electric utility, the lights get shut off. You don’t have that sort of leverage.

Doctors spending over $32,000 on health information technology

	To be fair, though, how people pay is also a reflection of how they are billed. The power company, like most organizations, presents customers with bills online. It’s the preferred way as more and more consumers manage much of their lives online. Interestingly,

 Deloitte’s Survey of US Healthcare Consumers

 found that 70% of respondents would prefer to get their healthcare bills in digital form. Remarkably, 

 of all healthcare bills are sent to patients in paper form. More than being of another era, paper bills are at odds with consumer behavior. The once or twice a month bill paying exercise has been replaced by online bills that, once opened and understood, get paid immediately.

	A key point to dwell on is the aspect of understandability. Most medical bills are as easy to comprehend as the hieroglyphics on the walls of tombs of the Egyptian kings. Fold into that the confusion created by the lack of alignment between the bill and an Explanation of Benefits and it’s no wonder open balances grow and age.

	Evidence of this can be found in a detailed analysis done by ACA International, a credit and collections industry association, its 

. Drilling into average recovery rates -- what was collected -- in the healthcare industry, findings show non-hospitals, that being largely medical practices, have a 21.8% collection success rate among patients. Stated bluntly, if that’s your practice, you’re getting about 20 cents on every dollar billed. That’s not a formula for continued success. And, as deductibles rise, the ability for you to avoid financial disaster gets to be tougher if you don’t take patient balances seriously. So what to do?

	Institute a time of service collection process. Get some portion of the expected balance before a patient even steps into an exam room. This will help with cash flow and keep a lid on the size of outstanding balances.

	The Medical Group Management Association notes that as many as 3.4 paper statements must be issued before any payment is received. Given that, evolve toward a faster, more efficient and effective mode of billing. Look to ditch the paper and go paperless. The payment cycle can be cut to as little as one-tenth the time you’re experiencing with paper bills. Plus savings per payment can be as much as $4.00 per statement. Along with electronic billing, look for a solution that aligns charges with an EOB and makes it utterly clear what’s been charged, what’s been paid and who owes whatever remains. Eliminate confusion and the willingness to pay spikes.

Female doctors earn $20K less than male colleagues

	Lastly, ask your business office or outside billing service or revenue cycle management firm, if you’re using such outfits, whether these moves can boost your practice’s collection rate.

	If they say yes, good. Then ask if a 50% collection level is attainable. Let me assure you, by taking the actions I suggest above, the answer can be yes.

As deductibles rise, the ability for you to avoid financial ruin gets to be tougher if you don’t take patient balances seriously. So what to do?

Author | Tom Furr

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