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Ever-growing patient balances are forcing healthcare providers to get creative about collection strategies. For some providers, credit scores offer insight into a patient’s probability of paying a large balance. However, this practice is controversial and possibly detrimental to the provider-patient relationship. The question of whether FICO, the organization behind credit scores, belongs in healthcare is gaining more traction. Ultimately, providers must decide if reviewing patient credit scores is worth the risk to the patient experience.

Why pull a patient’s credit score?

Patient balances have been on the upward trend since the introduction of high deductible health plans (HDHP). These plans require patients to meet a deductible before covering most costs. HDHP were thought to reduce unnecessary provider visits with higher out-of-pocket costs. However, between 2013 and 2017, healthcare utilization declined only 0.2% while medical costs increased by 17%. (Healthcare Cost Institute) Based on this trend, HDHP only increase patient balances.

The large balances pressure providers to collect more of their revenue from patients, not payers. Yet, 81 percent of providers could not collect a $1,000+ bill in 30 days from patients. (Provider Healthcare Payments Survey 2018) As providers struggle to collect, credit scores offer insight into whether a patient will pay.

What can patient credit scores tell providers?

In school, academic performance is summed up by grades. If students do well, they are rewarded with As. If average, they receive Cs and poor performances fail with Fs. In the same way, credit scores act as grades to financial performances with lenders. For example, if you pay your credit card bill on time every month, you are rewarded with a higher credit score. While it may seem straightforward, there are many factors that FICO uses to calculate credit scores. In turn, credit scores tell lenders how much risk they take on by giving that person credit.

How can credit scores shape the future of provider organizations?

There is little evidence that credit scores give providers the insight to collect large balances. Depending on a provider’s process, pulling a credit score may hurt the patient’s future score. If providers do want to review credit history, it adds a new dynamic to the patient-provider relationship. With credit information, providers take on the role of a lender. That is a separate debate to consider.

What are the impacts of credit scores to the patient experience?

A credit score is based on a patient’s credit history. However, there is more to a patient than credit history. For some patients, low credit scores are a result of unfortunate circumstantial influences such as job loss. Even if a credit score is low due to past negligence, it does not necessarily translate to how they will pay medical bills. Ultimately, patients visit providers to get better and may not consider how their credit history will affect their health. Despite a low credit score, payments should still be the least painful part of the patient experience.

Can providers guarantee payments without patient credit scores?

Based on the success of other providers, patient financial history is not needed to achieve payment assurance. Payment automation is proven to guarantee payments with minimal work from staff. To further boost collection efforts, providers can invest in understanding a patient’s financial preferences, not history. This ensures patients have the options most likely to appeal to them and result in a payment. Not only will providers achieve payment assurance, they also connect with patients on how they want to make payments, improving the overall patient experience.

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