A recent Kaiser Family Foundation study found that consumer out-of-pocket health care expense increased 77% from 2004 to 2014 while wages only increased 32% over the same time period.1 This supports the prediction that the consumer cost of health care will only continue to increase over time. The larger question is who will be responsible for paying those rising costs, consumers, employers, payers or the government? An important question providers are asking is “Will I be able to collect payments that should be the consumer’s responsibility? Recently the cost shift has been directed at the consumer through increased co-insurance and deductibles.1 In 2012, consumer out-of-pocket (OOP) expenses were estimated at $320.2 billion dollars or just over 10% of total health care expenditures.2 It is unknown if this number will continue to grow or decline with the dynamic changes in health care.
Historically collecting out-of-pocket consumer expenses (co-payments, co-insurance and deductibles) was not a top priority for providers, although payers required them to make a “good faith” effort. For providers the primary focus was on collecting third-party (payer) payments which represented the primary source of expected reimbursement. Providers, however, are recognizing that the financial landscape has shifted as their margins shrink and consumers become responsible for a significant portion of their expected reimbursement. This dissertation will review and compare three case studies with very similar interventions to test a proposed model for improving front-end collections (FEC) of out-of-pocket expenses. It will provide empirical results that can be disseminated throughout the field. It will also attempt to identify other factors that impact the success of front-end collection efforts. Many hospitals, health systems and physician practices have already started to prioritize front-end collections to enhance customer service and improve financial viability because of the market changes. Through the implementation of five primary performance improvement interventions, these case studies will provide insight into the following questions:
• Did these interventions have a positive impact on front-end collections?
• How much of an impact on front-end collections did all the interventions have collectively?
• Did one intervention have more of an impact than another on front-end collections?
• What factors were associated with successful interventions?
The five interventions are focused on improving front-end collections (out-of-pocket consumer expenses) while educating consumers on their financial responsibility for health care. Results from all three case studies demonstrate that front-end collections were enhanced as a percent of net patient revenue as evaluated by reviewing the 12-month average for the baseline period compared to the intervention period. All three case studies experienced an increase in FEC when comparing the baseline to intervention periods. Net collections from baseline to intervention periods increased for all three case study organizations. Gloria Medical Center realized an increase of 43%, Fitzgerald Community Hospital realized the largest increase at 196% and Byrne Hospital achieved a 129% increase. All three organizations studied have experienced a growing consumer population covered by high-deductible health plans; these types of plans are rapidly becoming more of the norm for health insurance products selected by consumers. The major component of high-deductible health plans is as the name implies, higher deductibles which equates to additional out-of-pocket expenses for consumers and greater financial responsibility for their care
