The healthcare debate rolls on with hot rhetoric off the charts this political season. Despite calls for repealing the ACA or expanding Medicare for all, the already-broken system is not likely to be torn asunder anytime soon. Though frustration remains high, some of healthcare’s most pressing financial problems can be solved right now, within our communities and without government intervention.
High-deductible health plans have been proliferating for years now, creeping up on millions of Americans. With an accident or illness, patients can suddenly find themselves responsible for their full deductible, which can be as high as $5,000 for an individual and $10,000 for a family – money they simply don’t have in their checking accounts. As a result, the percentage of AR that providers must collect from patients has shot up by orders of magnitude over the last decade. Statistically, providers’ collection rates from patients are far lower than from insurance companies for several reasons:
- It takes longer to get paid, and collection from patients is costly.
- Many providers offer interest-free payment plans, but the expense to administer them is high. With outstanding balances tied up as unproductive AR, they are invariably a bad deal for the provider.
- Most providers only offer these plans up to 12 to 18 months, which can still leave many patients with unaffordable payments leading to higher default rates than with longer-term loans.
- Even though the provider owns the AR, they can’t use it to hire or improve services when it is being paid back so inefficiently.
- Patients prioritize medical bills far below other payments.
The outcome: healthcare providers have become debt collectors – less friendly, more aggressive and, unfortunately, filing more lawsuits. The costs are higher, the collections are lower, the opportunities to improve services are inhibited, and the natural goodwill in the community that a do-no-harm caregiver is supposed to enjoy is cancelled out with bad blood. Billing managers’ jobs are hard enough without having to be the bad guys.
The solution to this patient/provider lose/lose situation is not likely going to be insurance companies lowering deductibles. Instead, enter the trusted community bank where the provider is paid in full and up front by the professional lender. No more collections burdens, and no cost whatsoever for the provider.
The Epic River Patient Lending Network makes these relationships happen, enabling providers to seamlessly receive full payment and transfer patient debts to partner banks and credit unions.
Instead of paying with high-interest credit cards or chased by creditors, patients are guaranteed low-interest medical financing with transparent payment terms, while building their credit scores at the same time. The provider can return their focus to delivering the best care at the best price at the lowest cost. The financial institution gains new customers with more revenue-generating loans. Win/win/win scenarios are rare in healthcare, but Epic River is creating them every day between provider, bank and patient.