You and your team focus everyday on providing quality healthcare. Your ability to invest in premier healthcare initiatives and provide the highest quality of care depend on sound financial decisions. That’s why it is important to focus on bottom-line impacts from all areas of your business operations. In addition to being conscious of costs and revenue at the front end, consider an added focus on optimizing income at later stages in the AR cycle.
A typical healthcare provider’s cost to collect is between 2 to 3 percent of its revenue. This large percentage presents great opportunity to optimize your investments. From point-of-service collections and improved charity processes to third-party payor management and technology, there are many options to consider. What can you do NOW to make a difference with minimum time and cost investment? Optimize your debt collection ROI through assessments of your vendor partnerships.
Creating or refining a plan for assessing collection vendor partnerships is easily achieved, can be quickly implemented and will produce positive, short- and long-term effects. Here are three key areas to consider when evaluating your current and future partnerships.
1. Performance Scorecards
How do your agencies compare? Are there trends in performance? What performance metrics are important to you? To them? If you partner with more than one third-party agency, scorecards are a must. Creating a platform to consistently compare key statistics will allow you to make future adjustments and decisions that create a positive impact on your bottom line. Implementing a formal scorecard process will not only boost competition – and in return performance – it will also help your agencies better understand what metrics are important to you and how they can adjust strategies to improve overall performance.
2. Net Back
What is the ROI of your collection agency investment? What factors affect net back? Many facilities have already found the best option isn’t always the lowest contingency fee. Instead, the best option is highest net back and best overall value. Calculating and monitoring this key statistic will allow you to best understand the value of your collection partner’s performance. It will open the door for communication with your agency partners on ways both parties can make adjustments that generate an increase in net back.
3. Patient Advocacy
Are your agency partners able and willing to take the extra step to assist your patients? How do they accommodate patient’s ability to pay? Do your agencies hurt your brand or do they promote your reputation in the community? Patient advocacy is more than being nice. It involves taking the time to listen and understand, creating win-win solutions, offering convenient payment and communication options and treating every patient with respect and dignity. Conduct random monitoring sessions with your vendors’ associates or ask for call quality analysis. Compare the availability and ease of use of communication portals and payment options. You may even ask returning patients for feedback on their experience.
Agency scorecards can be a simple process to implement that will yield many benefits. I’ve seen this not only increase performance overall, but provide a way to systematically measure your agencies and make informed decisions on how to manage your collection strategies. Our experience with clients’ performance assessments range from third-party agency comparison services to self-managed spreadsheets and charts. We have even helped several of our healthcare clients establish their own agency scorecard. Either way, they achieve the same outcome – increased ROI that impacts the bottom-line.