Internet-based search tools can help reduce bad debt - Business

Healthcare Financial Management, June, 2002 by Lynn A. Degrote

Customer support is another important feature of an Internet-based search tool. Before signing up for a service, potential users should find out how customer questions are handled. Customer support should be available via phone or e-mail, and customers should not have to wait long for responses to their questions.

To optimize return on investment, healthcare organizations should determine how they expect the service to meet their needs. For example, they should determine whether they want to spend less time searching for information on each account, reduce the number of days in accounts receivable, or decrease the number of accounts sent to collection agencies.

Before implementing a search tool, healthcare organizations first should analyze their volume of returned mail to determine how often searches should be conducted so they then can establish a return-on-investment baseline. Next, they should assess how long staff is spending on each search. Because search tools can be precise, the most accurate information typically is found in the first three minutes. Healthcare organizations also can benefit from having admitting and emergency department staff trained to use a search tool to verify patients' addresses, phone numbers, and Social Security numbers. Such verification would ensure that accurate information is documented at the time of check-in.

Case Example

Like other healthcare organizations, All Saints Health System in Fort Worth, Texas, prides itself on putting patients' needs first. Recently, however, the system found that it often was discharging patients without obtaining accurate and complete billing and contact information. Last year, Barbara David, self-pay collector at All Saints Health System, noticed an increase in returned mail, as well as incorrect phone numbers and addresses on patients' accounts. At one point, she was receiving more than 200 pieces of returned mail per week. During that time, she tried to find correct contact information for the returned mail by calling information for telephone numbers and using a paper directory of residents in the Fort Worth area. She made nearly 250 calls per week to directory assistance. At $1 each, those directory-assistance calls cost the system an average of $1,000 per month.

Despite her detective work, David could not locate all the patients, particularly those who had unlisted phone numbers. She even called the post office to see if any of the patients' addresses had the incorrect zip codes. Often, she would learn that the address was incorrect. As a last resort, she would contact the patient's place of business or next-of-kin. Using this tedious, time-consuming process, she spent up to 20 minutes on each piece of returned mail.

Most of David's time was spent searching for information on self-pay patients, who typically were uninsured and likely received emergency care. In about 90 percent of self-pay cases, contact information gathered upon admittance was incorrect or incomplete. A recent survey found that hospitals that aggressively focus on inpatient collections of money owed by self-pay patients have lower amounts of bad debt than those that do not. (d)