BALTIMORE, June 19, 2018 /PRNewswire/ -- Sage Growth Partners (SGP), a Baltimore-based healthcare research, strategy, and marketing firm, today announced new survey findings with hospital leaders' perspectives on bad debt, its causes, and their organizations' collection strategies. SGP developed and administered the survey on behalf of Dorado Systems, a healthcare technology company that facilitates communication between providers and payers through its proprietary technology, to gain insight into how bad debt is perceived and addressed by hospital leaders. The survey received 100 responses from hospital C-suite executives and finance leaders.*
Key survey findings include:
The majority believe insurance reform is to blame for bad debt, especially leaders at smaller hospitals
- Fifty-nine percent say insurance reform – such as higher patient copays and deductions – is the biggest cause of bad debt.
- Only 17% of total respondents attribute bad debt to patient delinquency. Other reported causes of bad debt include: ineffective facility-specific RCM processes (11%), industry-wide RCM complexities and regulations (10%), changes in reimbursement models (2%), and a high poverty rate (1%).
- Leaders at smaller hospitals were more likely to attribute bad debt to insurance reform: 75% of those at hospitals with 50-100 beds and 68% at hospitals with less than 50 beds blame insurance reform.
- Of the 11% who cited internal RCM processes as the biggest cause of bad debt, the large majority (81%) were C-suite executives (CEOs, CFOs, and COOs).
Half expect to recover a conservative amount of bad debt – up to 10% – a significant write-off as more than a third say their bad debt equals more than $10 million annually
- Fifty-percent estimate they can recover only up to 10% of their bad debt, meaning that up to 10% could actually be recovered from a payer or self-pay patient.
- Forty-one percent estimate they can recover between 10-20% of their bad debt, while only 9% estimate they can recover 20% or more of their bad debt.
- Thirty-six percent report their organizations' bad debt is more than $10 million – 20% report it's between $10-30 million, 10% report it's between $30-50 million, and six percent report it exceeds $50 million. Two-thirds (64%) report their organizations' bad debt is $10 million or less.
One in five organizations have no partner or internal process in place to proactively recover bad debt
- Twenty-one percent of respondents are using neither an in-house process nor a third-party vendor for bad debt recovery.
- More than a third (36%) are using a third-party vendor as a bad debt recovery solution and a quarter (25%) have created an in-house process for bad debt recovery; 18% are using both approaches.
- While 82% report they re-check patient insurance eligibility, almost a fifth (18%) do not.
- Of those who do not re-check patient insurance eligibility, almost a third (28%) also have no in-house process or third-party partner for bad debt recovery.
"Bad debt is an industry-wide issue that has only grown increasingly more challenging in the last five years," said Dan D'Orazio, CEO of Sage Growth Partners. "While external factors like insurance reform have compounded the problem, it's important for leaders to talk about this issue strategically with their teams, and to remember that there are steps they can take to mitigate bad debt."
"Leaders can understandably feel like they don't have control over bad debt and blame it on external factors, but unless they're already rechecking insurance every day, it's likely that there's more they could be doing," said Edward Kennedy, CEO of Dorado Systems. "We commissioned SGP to conduct this survey to better understand the extent of bad debt, leaders' perception of its causes, and what they are doing about it. Recovering 10% of bad debt is a conservative estimate, so it was interesting to note that a full half of respondents believe only up to 10% of their bad debt is recoverable. With bad debt topping $10 million for more than a third of respondents, this is a significant amount of money being written off. Whether it's through internal processes or external partners, provider organizations should take proactive actions to ensure they get paid as much as possible for the care that was provided."
*About the Survey
The online survey was administered to hospital C-suite executives and finance leaders in May 2018 and collected 100 responses. Respondent titles included CFOs (36%), CEOs (18%), directors (26%), VPs (10%), COOs (4%), managers (3%), supervisors and other (3%). Small, medium, and large organizations were represented evenly: less than 50 beds (22%), 50-100 beds (20%) 101-200 beds (20%), 201-500 beds (20%), more than 500 beds (18%).
About Dorado Systems
Dorado's primary focus is on maintaining efficient communication between providers and payers, allowing information to be exchanged quickly and easily. Through simplified APIs, secure network connections, complete workflow tools and seamless integration, Dorado is using its years of proven healthcare expertise to improve operations and reduce cost for providers, vendors and payers across the nation. As an approved Network Service Vendor (NSV) and Health Information Handler (HIH), Dorado is one of only a few vendors directly attached to Medicare's network, providing secure connectivity solutions to various hosts and applications. Founded in 2007, Dorado Systems is located in Haddonfield, NJ and serves such clients as Genesis, PCC and Sava Senior Care. Visit us online at www.doradosystems.com.
About Sage Growth Partners
Sage Growth Partners accelerates commercial success for healthcare organizations through a singular focus on growth. The company helps its clients thrive amid the complexities of a rapidly changing marketplace with deep domain expertise and an integrated application of research, strategy, and marketing.
Founded in 2005, Sage Growth Partners is located in Baltimore, MD and serves clients such as Philips Healthcare, Quest Diagnostics, Launchpoint, Ingenious Med, and ArborMetrix. Visit us online at www.sage-growth.com.
SOURCE Sage Growth Partners