InstaMed Blog

We’ve covered the challenges healthcare payers face as rising consumerism and healthcare reform impact the industry.  Now, let’s look at the healthcare provider’s perspective.  Here are the top four risks to healthcare providers as the industry evolves:

4. Rising Administrative Costs
Providers will face increasing administrative costs to maintain the same level of revenue. Provider front offices will need to spend more time with patients to work through their payment responsibility and helping them understand their payment options.  Provider back offices will need to spend more time and money sending out multiple patient statements and trying to collect patient balances.

3. Rising A/R and DSO in A/R
Providers will be forced to deal with varying sources of revenue and increasing challenges to collect. This will increase the level of accounts receivable on the books at any given time.  Furthermore, as patient responsibility increases and patient benefits change, patients will get more confused and even ignore statements, which will push out the days to collect.

2. Rising Bad Debt
The increased dependency on patient payments will inevitably increase the level of bad debt that providers are forced to absorb in their income statements.

1. Lower Payments
Providers will forego collections for smaller amounts (“death by a thousand cuts”). Additionally, providers may try to negotiate deeper discounts directly with patients in return for some level of payment assurance.  Finally, providers may not understand the changing benefit structure of their patients, and may miss the opportunity to collect from their patients altogether.

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