Those Pesky Patients

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Cheryl ProvalTo the Standard & Poor’s downgrade of US sovereign debt, the CMS proposal to slash the radiology professional component, and the stalemate in Washington, add yet another threat to solvency that has slipped nearly undetected onto the horizon—your patients.

In flush times, hospitals and physicians were not aggressive about trying to collect copayments from insured patients. The uninsured patient was frequently treated as a write-off, especially if the encounter took place in an emergency department.

As our mystery feature on page 54 by James Kieffer, MBA, reveals (spoiler alert), the unwillingness of providers to make a concerted effort to capture copayments from patients is having a very noticeable effect on receipts. If radiology reimbursement had not been cut so relentlessly over the past five years, maybe no one would have noticed. In the case of this practice and its imaging center, though, accounts receivable sprang a leak, and no one knew where it was coming from—until it was traced to patient copayments.
Why, you may ask, must one engage an MBA to come in and analyze accounts receivable, in agonizing detail, to uncover the source of the missing revenue? The answer, of course, is that it is not easy to measure an unknown.

Problem 1: Neither the practice nor the patient knows the amount of the copayment. Let’s face it: Insurance plans are so complicated, and health care is so fragmented, that only the insurer knows for certain whether the patient has met the deductible, what the amount of the copayment is, and whether the service is covered.

Let’s imagine that insurers are required to make this information available in real time, at the point of service (in the parlance of the retail trade), to providers—a sidecar requirement to the federal meaningful-use initiative. This brings us to the next problem.

Problem 2: The provider culture is wimpy about taking money from patients. Call it mission or something else, but many providers don’t make a point of trying to get their copayments up front, trusting that the patient will put a check in the mail. This is a mistake, according to Jerry Peer, a presenter at the RBMA’s Spring Summit. He cited research (see page 14) indicating that if you do not collect at the time of service—before the patient leaves the premises—you can expect a return of less than 40%.

Growing copayments and high-deductible plans, however, have changed the game for the patient as well. The $10 copayment is nearly obsolete, and deductibles are on the rise, which brings us to yet another problem.

Problem 3: The patient is shouldering an increasing share of the bill at an inopportune time. People are broke, basically, and if they aren’t, they are worried that they will be soon. In reporting 2010 census data, the Wall Street Journal referred to the first decade of the century as the “Lost Decade for Family Income,”1 a decade in which median household income dropped 4.8% over the decade and the number of people living in poverty increased 14.3%, the highest since 1994.

The number of people 25 to 34 years old who were living with their parents rose 8.4%. This, as we all know, was followed by a recession from which we continue to suffer. If your patients have the money, they are reluctant to let it leave their hands. Some of this reluctance is fear, and some of it is due to something else.

Problem 4: There is a culture of health-care entitlement. At a talk given by health-care futurist Jeff Goldsmith, PhD, three years ago, I was struck by a number he shared: US residents were spending less on health care than they were on Christmas presents. While that might have changed in the intervening years, the culture of entitlement remains.

As a patient, I am somewhat conflicted about sharing this inside intelligence with you, but as the editor of Radiology Business Journal, it is my duty. This is how a patient thinks: mortgage/rent, utilities, and credit-card debt are at the top of the pile, and medical bills, for a number of reasons, are at the bottom. The thinking goes something like this: They already got a boatload of money from the insurance company, so they can wait while I eke out payments, at $10 a month, for the next 40 years. Besides, I need it more than they do.

If you don’t like—or know—the physician, then that makes payment optional. This brings us to a persistent problem in radiology.

Problem 5: I never even saw you. Why should I pay you? Radiology has a special challenge in collecting.