"Why Are Insured Patients Contributing to the Majority of Write-Offs in Healthcare Provider Organizations?"

Insured Patients Account for More Than Half of Bad Debts Written off by Provider Organizations in 2023

Patients with some form of insurance coverage accounted for 53% of the estimated $17.4 billion that hospitals, health systems and medical practices wrote off as bad debts in 2023. (Kodiak)

Data shows that patient collection rates leave provider organizations shortchanged. For bills of $100 or less, hospitals, health systems and medical practices collect only 69 cents on the dollar. As the bills rise in dollar amount, the collection rate only falls further.

The significant drop off in the collection rate when bills exceed $500 may reflect a widely cited KFF survey of consumers released in June 2022: About half of respondents said they would not be able to pay an unexpected $500 medical bill in full or at all. The decisions last year by three consumer credit rating agencies to remove unpaid medical debt of $500 or less from consumer credit reports may make patients even less likely to pay smaller bills, with no risk to their credit scores.

The amounts that so many health plans require patients to pay continue to grow, therefore providers need a strategy to help minimize the strain on their already thin margins. During scheduled encounters, start by solidifying point-of-service collection practices and requiring deposits from patients when facing higher-dollar financial responsibility. Also try providing patients with financing options for higher-dollar balances.

We help clinics identify which protocols and procedures to implement and can even onboard and/or train staff based on your clinic's individual needs. We offer a complimentary, no obligation consultation to evaluate ways to improve efficiency and increase revenue.