As patient financial responsibility continues to increase, collecting before or during the visit matters more than ever. Unfortunately, less than half of physician practices collect from patients at the time of service.1
In addition to the impact on your bottom line, non-monetary costs of waiting to bill and collect can hurt your organization’s efficiency, its reputation and brand identity, and your relationships with patients.
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1. [Medical Group Management Association]↩
The Real Cost to Collect After the Visit: It’s More than You Think
Respectfully collecting from patients at the time of service helps your bottom line, but it also protects your organization from serious damage to its reputation, its brand and its relationships with patients. Here’s a snapshot of what can happen when you wait to bill and collect.
- On average, it takes more than three statements—costing $5 to $15 each—to collect one patient’s balance in full.
- $169: Average outstanding balance, per patient
- 6%: Percentage of outstanding balances collected when a patient’s debt is more than $200
Approximately 75% of physician practices wait more than 90 days to turn overdue bills over to a collections agency.
Collections agencies charge an average of 30% of a patient’s balance and calculate their fees based on the age of the debt.
The longer an invoice has gone unpaid, the greater the cost to collect.
How much will you actually collect?
- 13.8% – Average recovery rate from collections agencies
$18,000: Average amount outstanding balances per provider per year
More than the Money
TIME: Post-visit billing and collections processes are labor-intensive, taking up staff time that could be better spent on higher-value tasks.
PATIENT EXPERIENCE AND RETENTION: The billing process is often the final and most influential point of contact between patients and their provider. Surprise bills or an aggressive collections experience leaves patients with a bad impression and can make them less likely to return for follow-up care.
COMPLIANCE WITH TREATMENT: Research shows there’s a direct correlation between patient-provider trust,
cost pressures and medication adherence. Aggressive collections efforts can diminish that trust and damage the patient-provider connection, which may negatively affect patients’ health outcomes.
REPUTATION AND BRAND IDENTITY: A bad collections experience can lead to negative patient reviews and damage an organization’s hard-earned reputation.
“Aggressive collection efforts after the visit rarely work—the process is time-consuming, expensive, pushes patients away and can ruin your brand.”
Principal, Woodcock & Associates
Providing patients with flexible, time-of-service collection options like card on file, online payments and payment plans will help you avoid both the monetary and non-monetary costs to bill and collect after the visit.
To learn how Phreesia’s Revenue Cycle applications can help your organization reduce its cost to collect, visit https://www.phreesia.com/products/revenue-cycle/.
Medical Group Management Association (MGMA)
JAMA International Medicine