In the ever-changing landscape of healthcare economics, there has been a disproportionate increase in hospitals' bad debt. Over the past three years, hospitals are grappling with over 45% surge1 in bad debt stemming from self-pay patients post adjudication (11% in 2018 to over 57% in 2021).

If your physician’s office is plagued with a large number of accounts that have an outstanding patient responsibility, then you likely know the negative impact late payments can have on your cash flow. Managing your revenue cycle efficiently and reducing your days in accounts receivable (DAR) is essential to having the funds you need for office improvement, employee training, and other expenses that ultimately contribute to patient satisfaction. Requiring payment at the time of service is a sure way to lower your DAR, however, this is not a feasible option for many providers and patients.

Whether it is for a routine preventive health exam or treatment for a medical condition, everyone needs to go to the doctor at some point. Unfortunately, not everyone can afford to pay the medical bills associated with their treatment, leaving many Americans drowning in medical debt. In fact, a recent study concluded that nearly 43 million people in our country have unpaid medical debts. There are many reasons why a patient’s medical bills may go unpaid and in today’s post, we’ll review a few of the more common causes of the troubling impact this has on both personal bank accounts and the larger economy.