HFMA ANI 15: How one hospital system uses proactive communications to boost patient collections

Diane Watkins calls it the "two-for-one" price estimate.

Watkins is vice president of revenue cycle for Saint Luke's Health System in Kansas City, Missouri. During this week's Healthcare Financial Management Association's annual national institute, she recalled a case in which the 10-hospital system provided an oral price estimate for a maternal delivery. However, the father, an attorney, later balked when he received the bill. It turned out his wife was delivering twins--something that was not disclosed at the time he requested the estimate.

"He was adamant as to why he shouldn't have to pay for the second child," Watkins recalled during her presentation, entitled "Focusing on the Patient While Improving Revenue Cycle Performance," even though she noted that he would have to pay for that child moving forward.

Clear communications with patients about their upfront costs are among the challenges St. Luke's encounters on a daily basis, according to Watkins. The system's patient mix is 42 percent commercially insured--many of them with significant out-of-pocket costs--and 8 percent self-pay. That means the issue comes up frequently.

"Patient responsibility is growing exponentially...patients owe more money than ever," Watkins said.

Some 31 million Americans are underinsured and do not earn enough money to comfortably afford their out-of-pocket costs, according to recent research by the Commonwealth Fund.

A recent report by the Dallas Morning News suggested that there are a variety of resources available for insured patients to negotiate their hospitals bills. And in Minnesota, unpaid hospital bills continue to grow, despite that state's embrace of the Affordable Care Act, the Minneapolis Star Tribune reported.

Research conducted by Saint Luke's concluded that if patients are satisfied with their billing experience, 70 percent of them would pay their bills in full, and 90 percent would recommend the hospital or their physicians.

So four years ago, the system began to offer upfront patient responsibility/price estimates to everyone who were scheduled for procedures that involved an out-of-pocket liability estimated at $250 or more. The number of price estimates offered jumped from a little more than 2,500 in 2010 to nearly 40,000 last year. 

As a result, Saint Luke's provides more extensive training to employees who interact with patients over bills and financing issues to ensure they clearly communicate the information, as most price estimates are given over the phone (the system does not post publicly post its per-procedure prices).

Quarterly performance bonuses are also paid to higher-performing employees that range from $100 to $400, depending on productivity targets, she said.

Collections from patients at point-of-service climbed from less than $3 million in 2009 to $5.7 million in 2013, although it dipped to $5.4 million last year.

Saint Luke's received some bad publicity in 2014, when it settled a class action suit alleging it had tried to attach auto insurance judgments from patients injured in car accidents as opposed to filing a claim against their health insurer. Watkins declined to comment on the impact of the settlement without a media relations executive present.
To learn more:
- read the Dallas Morning News article 
- check out the Minneapolis Star Tribune article
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