Cash collection, and its patient financing technology, has finally changed for the good
This article is part 2 in a 2-part series on de-risking cash acceleration. You can read part 1 here.
You’ve done your homework and determined that your healthcare organization needs cash flow acceleration. You see it as the best way to avoid operating margin challenges in shaky markets while ensuring you better serve your patients.
With 100 million Americans in medical debt at a total of $195 billion in uncollected bills, you also know that squeezing an already stressed demographic may not produce the results you need and risks pushing away the very group you’ve vowed to serve.
The answer exists in a new approach to patient financing, fueled by new technology. Still, two essential processes need to happen to identify the proper way forward: Assessing how increased cash flow affects your specific organization and determining which improvements offer the greatest lift.
Step 1: Assess the big picture
It’s easy to think more cash will solve problems, but not pinpointing “which” problems could lead to the mismanagement of any new source of cash flow. Look at your current financial state to see where the gaps currently exist, using these questions as a guide:
- How much of your patient accounts are going to collections as a percentage of the total? What is the total dollar amount you send to vendors per year?
- How many of those patient accounts are being written off as bad debt? What effect does that amount have on your total revenue and operating budget?
- What one or two things, if solved tomorrow, would bring in the most cash right away? What solutions would lead to more cash down the road, if scaled over time and without additional staff or IT resources?
When answering these questions, keep a few truths in mind. First, conventional wisdom treats extended accounts receivable as the norm. You may feel pressured to hand over accounts on day one, out of the fear that patients aren’t going to pay, or that it’s impossible to collect before day 30 or 60, or even 90. These messages, while widely accepted, only represent part of the picture. The underlying issue is patient billing that’s largely inflexible and represents one of two options: provider-funded plans with extended A/R, or 3rd party collections. One risks the provider’s operating health with a squeeze on cash flow, while the other risks harm to the patient relationship and credit history.
When considering the “big picture” of potential cash flow acceleration, do so with new possibilities in mind. Yes, provider financial solutions had remained somewhat unchanged over the past few decades. However, when business leaders across six industries were surveyed in 2021, 92% of the healthcare leaders claimed to adopt new ways of working (including 82% specifically mentioning new tech tools and infrastructure.)
Now that artificial intelligence (AI) is driving many of the best advancements, collecting on patient balances can benefit from sophisticated automation and personalization that increases provider efficiencies many times over.
Step 2: Apply targeted improvements
The possibilities for AI-powered healthcare solutions appear so promising that it may be hard to go into this new frontier with a specific ask in mind. With a better view of your current financial situation, including gaps in your patient experience goals, you can better ask for what’s truly needed. Here is how the latest patient financing solutions offered by PayZen can meet specific acceleration goals.
It lets AI do the hard work – better than people can do it. When considering a patient’s ability, our AI uses over 30,000 data points or “attributes” that collectively more precisely indicate what each patient can afford each month. The data goes far beyond credit scoring models or income reports and can generate very nuanced models unique to each patient.
Why is this important? The difference between asking for $100 a month from a patient and $92, could mean the difference between a collected bill and a write-off. This distinction is crucial because we know a few things about how people pay:
- A payment amount more in line with an individual’s ability to pay can improve the rate of collections.
- A personalized payment amount tells the patient you are creating a custom solution for them, treating them as the individual they are.
Customization creates a better patient experience. One in 11 adults says they’ve avoided or delayed medical care because of cost, creating a window of opportunity for the provider that can treat these patients before the manageable medical conditions become emergency room cases. While it can be impossible to discern at a glance those who would skip care from those with cash on hand to pay at least some money up-front, PayZen gives all patients a chance to pay for healthcare over time and reduces the risk to a patient’s wellbeing. Its AI technology personalizes the repayment term and the monthly amount to encourage both repayment and ongoing continuation of care.
Revenue increases at the onset of the repayment agreement. Unlike other repayment plans or the act of “selling” accounts to collection vendors at a steep loss, PayZen’s solutions offer upfront payment of patient accounts. They give you an almost instant cashflow boost with less risk to your patient account portfolio or your patient’s trust in your organization.
What could you do with millions more in net patient revenue collected this year without adding accounts receivable staff or IT support? What operating improvements would you make with improved cash flow and lower cost of capital? How could you pass these improvements to the community in line with your mission?
Bringing it all together
Whether you’re a revenue cycle leader for an academic medical center or run a small, rural clinic, the need for an improved cash flow looks much the same. We must learn to do more with less but without decreasing what we offer to our most valuable stakeholder: the patient.
Fortunately, by using a well-informed and strategic approach to de-risking cash acceleration, providers don’t have to choose between patient experience and profitability; the two can absolutely go hand-in-hand. With the AI-fueled technology and automation inherent to PayZen’s innovative platform, patient collections get more personalized and efficient, scaling as you go to deliver better ROI over time. As new patient accounts get set up, more cash comes into your organization, and the data-driven payment amounts remain accessible to your patients, leaving them in a better position to continue receiving care.
It’s a better kind of cycle.
Ask how PayZen’s approach to cash acceleration is changing things for both providers and patients with our fully automated Affordability Financing platform.