Significant Cash Improvement and Bad Debt Reduction Possible


WALTHAM, Mass., Oct. 23, 2008 - The difference between best and worst self-pay collections performance is upwards of 300%, according to an industry's first collaborative research effort organized and conducted by Connance, an innovator in patient revenue recovery solutions. 

For health systems across the country struggling to cope with unrelenting growth in patient revenue, Connance's research is the first to document the cash impact of underperforming collection effort and to size the opportunity for improvement in actionable terms.

Research Methodology

Over the past year, Connance has been working collaboratively with more than a dozen business office operations across a variety of healthcare providers' networks in the United States.  The objective of this research was to characterize the emerging self-pay landscape, to document relative performance of collection efforts, and to identify opportunities to improve provider collection efforts.  Participating facilities included for-profit and not-for-profit organizations, facilities in rural and urban locations, academic institutions, and religiously-affiliated systems.  Payment experience included more than 40 million patient encounters.

In order to adjust for different business mix, Connance normalized the providers' operational data to reflect a standard mix of patient and account balances, similar to how case mix indexes are used to compare physicians' performance.  The impact of normalization was substantial to every institution's performance and relative ranking. 

Key Takeaways

Among the primary findings of the Connance research:

  • Best performers collect three times as much cash as the worst performers.  The opportunity for improvement is substantial, roughly 2% of total net revenue for the average health system.
  • No single business office was best in all categories.  Even the best performers have areas where they can improve.
  • Differences in hospital networks' patient mix leads to misrepresentation of performance level. For useful comparison and performance diagnosis, multivariate normalization is required.

"Patient revenue is the fastest growing financial class in healthcare and one of the most pressing financial challenges," said Stephen Farber, Chairman and CEO, Connance, Inc. "As in all business situations, before you can make sustainable improvement you have to have a solid understanding of current shortfalls. In the case of patient collection, our research did just that - aggregated an unprecedented dataset, then normalized the data in a way the industry has never seen.  This approach has laid bare the dramatic opportunity for systems to double or triple their cash collection, and for even the best performers to improve."

"As the shift to consumer-driven healthcare continues and more patients have increased financial responsibility, our analysis suggests the cash opportunity is likely to double within five years," concluded Farber.     

For a copy of the Connance Research Collaborative Note "Size of the Prize", more details on what you can do to improve patient collection management processes or to inquire about joining Connance's collaborative research program, please send a request to [email protected] 

About Connance, Inc. (

Connance's technology-based solutions help hospitals and third-party revenue cycle vendors improve patient collections. Combining the experiences of numerous leading hospital systems with Fair Isaac Corporation's predictive analytics, Connance's Web-based agency management platform, account decisioning tools and benchmark reports increase cash, reduce costs and improve the patient experience throughout the collection process. Connance was founded in 2007 by senior healthcare executives with experience in both operating and transforming revenue cycle operations. Connance is headquartered in Waltham, Mass., with additional sales offices in Minneapolis and Dallas.

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Tsipora Cohen

Connance, Inc.


[email protected]