Patient Collection Problems? 3 Solutions for Reducing Bad Debt in a Consumer Market

Patients are more involved than ever in their own healthcare management, including where and how they pay for it. But increasingly high patient premiums, copays and deductibles make it difficult for patients to pay their share. What can independent practitioners do to ensure patient access to ideal care and manage collections – without eroding the patient/provider relationship? Here are three practical solutions.


First, how did we get in this situation?


Much of the consumerism we’re seeing today in healthcare arose from the pandemic, surging inflation and continually rising healthcare prices. As patients became responsible for a greater share of their medical costs, they started demanding more involvement in healthcare decisions. They wanted the transparency and digital accessibility they had grown accustomed to in other industries. They especially wanted more control over costs.


At the same time, the healthcare industry was looking for ways to cut costs. One solution has been the high deductible health plan (HDHP), attractive due to its lower monthly premiums. But there’s a catch. A large portion of costs end up falling on the patient – who is typically unprepared.  This explains the astronomical rise in patient debt. Credit Karma reported in September 2020 that their 20 million users had more than $45 billion in medical debt – an average of $2,250 for every person. And according to a KFF Health Tracking Poll, 46% of insured adults report difficulty affording out-of-pocket costs.


How do patients cope? Unfortunately, a disturbing number delay medical care or skip necessary prescriptions they think they can’t afford.


Independent practices face a conundrum. They want to foster increased patient engagement. But they also need a reliable revenue stream to stay in business. That means transforming the patient collection process into an easier, friendly experience. The best way to do that is through technology.


1. Modernize invoice notifications with technology.


Many healthcare practices still rely on outdated billing practices that fail to give patients a clear view of what they owe or how they can pay it. Confusing invoices are sent through standard mail channels (with added postage costs), only to land in a forgotten “to-do” pile. There they remain, gathering dust. Practices must then hound patients with annoying, and often threatening, late notices, or even resort to collection agencies. Providers accumulate large amounts of bad debt, putting cash flow at risk, while damaging their patient relationships over unpaid balances.


One answer is to replace snail mail with email or text billing. Many members of Generation X or Millennials rarely open snail mail. They do everything online. So it makes sense to deliver invoices electronically. Practices who adopt text billing report that the vast majority of patients pay their share the same day. They appreciate a timely invoice that clearly details charges, and indicates that insurance has already paid their share. An integrated EHR, billing and communications system will deliver these capabilities.


2. Offer a digital payment experience.


Once patients know about their financial responsibility, they need an easy way to pay. Research from U.S. Bank indicates that people prefer digital options for paying bills, including via portal, mobile app, contactless debit or credit card, or apps such as PayPal, Zelle or Venmo. Patients want the freedom, flexibility and convenience of making a mobile healthcare payment in the same way that they pay any other bill.


The demand for online payment options is quickly increasing. A recent survey found patients would use more digital or mobile wallets to pay their providers if these options were available.   


An integrated EHR, billing and communications platform lets patients store a credit card securely in its system, and then pay bills with a single click. They can do this directly from their smartphone, tablet or computer. Patients benefit by the convenience of taking care of obligations any time, wherever they may be, without having to find their checkbook and a stamp. 


3.  Nurture a more engaged patient relationship.


How does the move to digital billing and payments strengthen a practice? The immediacy of electronic communications helps patients feel more in control. As the old saying goes, knowledge is power. When patients know (and understand) their obligations, they are more apt to fulfill them. If they have questions, they can call the practice by clicking on the text or email. They can set up payment plans if necessary, and receive text alerts when an installment is due – again, with a link to pay by credit card. Options like these put patients in the driver’s seat, and treat them like consumers with choices – which, in fact, they are.


Speaking of choices, the dangers of not modernizing a practice’s patient-facing billing are very real. Recent data shows that 66% of healthcare consumers would consider switching providers for a better payment experience. By updating your billing communications, you can build patient loyalty and retention while improving collections, revenue and speed.


Affordable solutions are available today


None of the solutions mentioned above are expensive or complicated. Nor are they futuristic. All are readily available today in a modern integrated EHR platform with unified payment and communications solutions –  providing both practice efficiencies and bottom-line improvements.


Learn more at

About the Author

Kevin Clinton is the Director of Marketing, Payment Solutions and joined Kareo in 2019. He has more than 20 years of experience in Strategic Marketing and is...

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