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According to the CDC, the Affordable Care Act has decreased the uninsured population in the United States to 9.1%.  As the number of uninsured Americans has declined, the number of Americans covered by High Deductible Health Plans (HDHPs) has increased significantly.

The latest census data provided by the America’s Health Insurance Plan (AHIP) reports over 19.7 million Americans have HDHPs with these plans accounting for approximately 36% of all plan types.  Many of the individuals subscribing to HDHPs are ill-informed about their financial obligations required by these plans and are ill-prepared to meet those financial obligations.

A recent study performed by The Advisory Board Council analyzed the relationship between financial obligation and bad debt. They found that as financial obligation increases, the propensity to pay any portion of that obligation decreases, regardless of the income level of the patient:


How can hospitals proactively decrease the amount of bad debt resulting from the increase in patient financial responsibility?

1. Be transparent.

Patients find the healthcare process to be complex. Many are unfamiliar with terminology like co-insurance, co-pay, and Whenever possible, educate your patients before costs are incurred. Provide patients with an explanation of what these terms mean and what their estimated financial responsibility will be.

2. Complete payment arrangements up front.

Work with clients to determine how they will meet their financial obligation. Speak to them about payment programs your hospital may offer. Request an up-front payment.   This may be difficult for hospital staff. Successful collections require a personalized approach. A one-size-fits-all approach will not be effective. Addressing the patient’s individual needs will improve your collection process.

3. Develop a process for self-pay balance collection.

A number of tools, software, and outsource services are available to Patient Financial Services (PFS) professionals—these range from buying credit information on guarantors to scoring engines that combine a number of broad national, or maybe regional attributes— this enable users to somewhat segment accounts and alter the number of letters and statements mailed to guarantors before the accounts progress to collections.  Yet, scoring and segmenting self-pay accounts, whether with an off-the-shelf tool, licensed software, or by the traditional early-out vendor, is only part of a move in the right direction.


Today’s best practices require more–they require the science of sophisticated behavioral and statistical analytics to truly understand individual guarantors’ attributes in a way real enough to determine who will pay, when they will pay, how much they will pay, and how best to elicit that payment. Learn more from our whitepaper: What Hospitals Must Know to Improve the Effectiveness of Their Self-Pay Collection Strategy.


Many studies have demonstrated that a patient’s payment experience colors their overall feelings about the services they from the hospital. As in retail, customer satisfaction is vital as patients begin to exercise greater choice, both in how much to pay and where to go next time. Generally, the last impression is a lasting one.

An expertly executed patient engagement strategy, fostering a satisfying patient experience, includes early and consistent contact with education surrounding the billing process, building patient trust in the process.