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Getting Impatient: How to Get Your Patients to Pay on Time

From the “the check is in the mail” to the “I left my wallet in the car, let me run and get it, tire screech triple play”, you’ve no doubt had your fair share of pain-in-bank-account clientele. Here are a few ways that are shown to get more patients to pay you in full and on time.

A study by the Medical Group Management Association found that medical debt rose 14% between 2008 and 2012. Whether that be from rising deductibles to a general economic downturn, that’s a big chunk of revenue leaking out the door, never to be recovered.

It’s not just the loss of income to be considered of course; staff stress and bad PR from patients bad mouthing your practice are just a few debt-related facets detrimental to your business. So what to do? Should you confiscate their wallets at the door? Or just go straight to the debt collector and get it out of the way? Here are a few ways that are shown to get more patients to pay you in full and on time.

Put It In Writing

You’re far less likely to get all the excuses and feigned ignorance if you make sure that your patients have all been briefed on your procedures and policies (financial and otherwise). Get a staff member to run through the more important policies with your patients and have your patients to read and sign them to show that they consent. If the patient refuses to consent, well, you might want to reconsider if they stay a patient at your practice. Red flags should be popping out of their ears if they refuse to comply with basic rules from the get-go.

Automate It

Paper is so 2015. Stop sending paper invoices and let the internet fairies do it for you. By offering your patients an online invoicing process, you can email your patient the invoice, and encourage them to pay it then and there while it’s top of mind. If it’s not quite top of mind enough (i.e. they ignore that first email), let an automated service do the following without the administrative drain. The patient will keep getting emails until the invoice is paid — this also cuts down on the administrative costs of your front staff mailing out invoice after invoice. Here are some options if you haven’t gone down this route as of yet.

Incentivize

Customers hate paying bills. They also love rewards. So incentivizing your patients to pay sooner rather than later may help curb the desire to ignore that invoice yet again. Discounts for payments under 10 days, gift certificates, discounts on future work etc. are all tools shown to encourage patients to pay, as well as facilitate urgency. The key is to make it enticing enough to be effective, but not too generous as to affect your bottom line. That may seem obvious, but offering someone 2% off their bill will probably not yield the results you are after. Here are a few other options.

The Power of the Nag

Never underestimate the power of nagging. Well not so much nagging, but putting a human element to the bill at hand. Rather than just seeing the account as a piece of paper from an uncaring corporate, the patient is more likely to identify with a warm human voice that can discuss the finer details. Have a staff member set aside 15 minutes a day to call late paying patients, with a gentle, very friendly reminder about their payments. For even better results, give the 15-minute task to all of your admin staff each day, working off a master list. Try not to see this as a drain on staff time, and look at the potential ROI for this small 15 minute window.

Get Them to Pay First

If the above options aren’t getting the results you’re after, you can always get them to pay first. In this 2014 NPR article, Ken Hertz, a principal consultant at the Medical Group Management Association says that many practices across the United States are changing their billing practices to include mandatory upfront payments.

“In the past, someone at the front desk would say, ‘Would you like to pay today?’ Because the simple answer to that is ‘Well, no! If I can walk out without paying, I’m walking out without paying!’ ” Hertz says. “Today, it’s more of, ‘Mr. Smith, you have an outstanding balance. How would you like to pay for that?’ “

Hertz said that this strategy has reduced bad debt at Mid State Orthopaedic by 25%.

This approach obviously won’t suit every patient, but setting these expectations up front will remove many a headache down the road. If a new patient can’t pay fully up front, arrange a down payment or a payment plan on the spots. Have as many payment options as possible; you may even consider having a tablet (of the electronic variety) in the waiting room where patients can enter their credit card/payment details.

If your new (potential) patient simply can’t do any of the above options, you should be able to kindly and respectfully point them to your closest safety-net hospital who will be better able to handle their needs

Debt Collection - The Last Resort

The final tactic is at the bottom of the list for a reason — it really should be your last available option. For starters, the debt industry recovery rate is only around 20 percent, according to Harry Strausser III, president of the Mid-Atlantic Collectors Association. From there, the collection agency will typically take 30-40 percent of the funds recovered as commission, so even if successful, you can be left as little as 12 percent of the original bill.

Bad debt collection is big, bad business; complaints against debt collectors were the number one category of complaint to the FTC in 2015. Car salesmen have nothing on this industry, and you don’t want that kind of PR if you can help it.

“The recovery is just completely miserable,” said Elizabeth Woodcock, principal of Woodcock & Associates, a physician consulting firm in Atlanta. “The costs are really high, and the public relations are just horrible.” Having a notoriously infamous industry attached to your name can put your reputation at stake; that debt collection agency may well curse your name for that patient, their family, friends and anyone else willing to listen to a subjective sob story.

Your best bet is to try any combination of the above options, and see what works for you, and your patients. Money is always an awkward subject, especially when it’s attached to one’s health, so approach it with an understanding of the patient’s position and their needs. Give your patients every option and opportunity to pay, with clear communications and guidelines, and you’ll be well on your way to reducing bad debt, and improving your practice’s income.

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