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Patient-friendly, strategically funded financing: a solution for growing patient obligation
Mike SimmsVP of Revenue Cycle, Cone Health
Mark SpinnerPresident & CEO, AccessOneSeptember 3, 2016
Mike Simms• Responsible for HB and PB Revenue Cycle for Cone Health• Has 30 years experience in Revenue Cycle• Recently awarded by Beckers “The top 15 RCM leaders to
know”
Mark Spinner• Strategic formation and day to day operations at AccessOne• Former CEO/Co-Founder of ProviderWeb Capital• Intersection of finance, technology and healthcare RCM
Speaker Bio
2
Costs are shifting to the patient
3
44% Of patients claimed they were unaware they had financing options4
¹ Moody's Investor Service 3/20142 KFF 9/22/153 Edison Research 20164 Becker's ACS 4/14/16
The growth of HDHPs are impacting patient costs and their ability to pay.
59% Of people would have a ‘somewhat’ or ‘very’ difficult time paying a $1,000 expense3
2014 2019E
$416B
$608B7.8% CAGR
US Out-of-Pocket Health Care Spending 1,2
Today in Healthcare
4
Affordability Becoming a National Concern
ECONOMYBurden of Health-Care Costs Moves to the Middle ClassRising out-of-pocket health care costs ‘means less money for other things’
August 25, 2016
What % of AR do you expect patient responsibility to be in 2017?
a) < 5.0%b) 5.0 – 9.9%
c) 10.0 – 14.9%d) 15.0 – 19.9%
e) >20.0%+
Poll Question #1
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• Patients want a reasonable estimate of their financial responsibility
• Patients want multiple financing options and payments methods
• Health Systems need to find innovative solutions to address new demands
A Shift to Patient Consumerism
6
7
Consumer Credit Compliance Considerations
• Assuming you are exempto Extend credit to > 25 patients for > 120 days; you
must comply at state and federal level
• Unintended patient discriminationo Inconsistent screening or discounts can put you in
violation of the Equal Credit Opportunity Act and the ACA 501(r)
• Not providing valid disclosureso “Know what you Owe” consumer disclosure law; The
Truth in Lending Act – Reg Z
Consumer payment plans subject to state and federal compliance laws. Penalties can be severe and damage your brand integrity
• How do you increase ROI with growing patient responsibility?
• How do you increase POS collections while maintaining patient satisfaction and brand goodwill?
• How to apply innovative patient financing solutions while minimizing recourse?
The Challenge
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• 6 hospitals and various outpatient clinics• 1,253 total beds• 400 employed physicians• Located in Greensboro, North Carolina
Cone Health Background
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• Limited patient financing/payment plan options
• Lack of consistent messaging across a large healthcare system
• Frustrating patient payment experience
Cone’s Challenge
10
• Created centralized pre-service center for patients
• Estimator to ask patients for payments at preregistration or at the time of service
• Changed patient payments vendor and upgraded patient statements
• Adjusted and structured payment plan policies• Partnered with vendor that provided
strategically funded patient financing
Payment Process Redesign
11
Are you offering payment plan options to patients via a 3rd party vendor?
a) Yes, 3rd party patient financingb) Yes, EBO sets up finance
c) No, internal team
Poll Question #2
12
Two Year General Analysis
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Our partnership with Cone Health System drove over $19m in cash payments on patient AR while delivering a 2.6% recourse rate – far below industry levels.
Category ResultsTotal patient accounts $29,775,000Net to Cone Health $19,118,555Amount remaining to collect $7,282,000Accelerated cash $10,829,000Net collection rate 64%Default recourse 2.6%Potential net max yield 85.9%
Initial 6 Month Collection Analysis
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Accounts aging more than 18 months demonstrate how strategicallymanaging recourse increases net yield, while controlling service fees.
7/1/20148/1/2014
9/1/201410/1/2014
11/1/201412/1/2014
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
Other Recourse
Recourse
Fees
Collected
Collection vs. Residual(6 months)
Other Recourse Recourse Fees Collected
Cash Acceleration Comparison
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27% - 39% monthlyincrease after 2years of maturity
Predictable funding significantly increases collection rate even after greater than 18 months of aging.
Overall Potential Net Yield
16
7/2014
8/2014
9/2014
10/20
14
11/201
4
12/201
4
1/2015
2/2015
3/2015
4/2015
5/2015
6/2015
7/201
5
8/2015
9/2015
10/20
15
11/201
5
12/201
5
1/201
6
2/2016
3/2016
4/2016
5/2016
6/2016
Cone Performance & Potential
Net to Cone Defualt Default Recourse Special Recourse
Net collection rates will continue to increase as accounts mature.
50.0%
40.0%
30.0%
20.0%
10.0%
• Easy to implement• Patients provided clear options system-wide• Patients can select interest free or interest
option depending on ability to pay• Patients can combine hospital and physician
accounts and receive one combined statement
Why Our Changes Worked/Best Practices
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• Provider oriented• Patient friendly• Cultural fit• Listens and adapts
What to Look For in a Business Partner?
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Are your current patient payment plan programs performing up to your expectations?
a) Yesb) No
Poll Question #3
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Health systems must innovate their revenue cycle to adjust to patient consumerism trends• Maintain patient-first culture• Evolving patient financial solutions• Compliance focus• Streamline processes while improving results
Conclusion
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Q&A
21