SCL Health cuts collections costs by 26% with patient collections tech
SCL Health is a nonprofit healthcare organization that operates eight hospitals and more than 100 service centers. With net revenues of $2.54 billion, SCL provides more than $222 million a year in community benefit in Colorado and Montana.
SCL Health had many decentralized sites and had recently merged with another large health system and needed to consolidate and streamline patient pay recovery.
“Until that point, we hadn’t utilized a vendor to help with management of patient collections, and didn’t have a strong strategy in place to optimize the process,” said Sue Bouck, senior director, customer service and self pay, at SCL Health. “We employed several different collections agencies, and had no insight into how these vendors were performing.”
The provider organization was not able to view the status of patient accounts and was entirely reliant on the vendors to report back on this. Each vendor provided differing reporting structures, and this lack of standardization and reconciliation made it difficult to compare and contrast the results the organization was getting. There wasn’t a strategy around which accounts would be given to certain vendors, and which would be managed in-house.
“We needed greater insight and control into our vendors’ activity, to ensure we were performing efficiently and maximizing the amount that was collected from patients,” Bouck said. “Our goal was to find a provider that could deploy technology to increase efficiency, reduce costs and centralize collections throughout our vendor network.”
After evaluating several vendors, SCL Health chose Waystar because it provided the most comprehensive, packaged solution, Bouck said.
“Their vendor management capabilities, combined with analytical support, were really unique in the market,” she explained. “We selected three solutions to help manage patient pay recovery from front to back: Waystar Patient Pay Optimization, Presumptive Charity and Agency Manager.”
Patient Pay Optimization offered the capability to optimize collections by implementing patient propensity-to-pay scoring. This allows SCL Health to evaluate which patients are most or least likely to pay their bills, as well as what methods would be most effective in collections, and tailor pay recovery strategy accordingly – particularly with regard to insource-outsource strategy, which is how SCL Health decides which accounts to manage internally and which should go to vendors.
“This was a big differentiator as it allowed us to significantly cut down on commissions, since we could now identify which accounts we could easily handle in-house, and which ones would likely be trickier to collect on and better handled by an outsourced vendor,” said Bouck.
Presumptive Charity provides automated charity screening capabilities, enabling SCL Health to identify which patients are eligible for financial aid, and write those bills off upfront. And Agency Manager enables SCL Health to monitor, manage and improve the performance of all collection agencies, giving greater visibility and control into both patient accounts and the success of vendors.
“Combined, we knew these solutions would alleviate the problems we were facing, guaranteeing us better vendor performance and higher pay recovery rates,” Bouck contended.
There is a variety of patient collections systems on the health IT market. Some of the vendors of these systems include AdvancedMD, Brightree, Chetu, Collectly, DAKCS, Experian Health, Kareo, Katabat, Parallon and Telcor.
MEETING THE CHALLENGE
SCL Health used the three solutions to successfully standardize and centralize the collections process, increasing vendor efficiency and lowering costs while increasing patient pay recovery, Bouck said. The healthcare organization said the implementation process took six months.
While it required an upfront investment of time and resources, it paid off immensely, she said.
“The solutions are primarily used by our Revenue Service Center, including those who manage self-pay and bad debt, along with our charity department,” she explained. “Waystar’s solutions are integrated with our EHR and also work closely with our collection agencies’ systems. Waystar processes and consolidates all of the data from these systems, and helps us define what to do with patient accounts accordingly.”
Since implementing the three solutions, SCL Health has cut the cost of collections by 26%, saving an estimated $254,000 annually in commissions for collections agencies. Patient Pay Optimization has been particularly essential in achieving this. Because of the propensity-to-pay scoring tool, SCL Health now has the ability to identify accounts that are likely to be paid fully and on-time, and can take those on internally.
“Since outsourced vendors take back anywhere between 5-11% of what they collect on, the ability to manage more accounts in-house has lowered our costs and driven significant savings,” Bouck explained.
SCL Health also has seen a massive increase in the amount it is collecting, for a total annual collections improvement of more than $20 million. Through Agency Manager, having greater visibility into vendors’ activity and being able to identify when to take action on patient accounts and when to turn them over to another agency has been really important in achieving a higher rate of pay recovery.
“It’s given us a level of insight and control that we never had before,” Bouck said. “This past year, we were also able to qualify $98 million of patient bills as charity, as a result of the Presumptive Charity solution. Not only is this providing our patients with financial assistance for high-quality care, it also helps us to spend less time and money on collections and reduces bad debt.”
ADVICE FOR OTHERS
“When considering whether to use a similar technology, we’d advise other healthcare providers to really look at the big picture,” Bouck advised. “While the cost and resources needed for implementation may seem like a large investment upfront, you need to think about the ROI you’d be getting. Take a look at what you’re currently spending money on, and contrast your current returns against what you could get with this investment.”
When one has no way of measuring vendor performance, one ultimately is going to spend more money on commissions and likely achieve lower pay recovery rates, she said.
“Furthermore, as health insurance deductibles continue to rise and patients take on greater payment responsibility, healthcare providers will have an increasingly difficult time with collections, so the need for technology like this will only become more important. If you commit to the investment, you’ll definitely see the value in the technology.”