simple psychology - how patient collections isn't about money, but respect

TSIToday Getting You Paid Faster

Simple Psychology:How Patient Collections Isn’t About Money, But Respect


Review of Other eBooks In This Series

There are certain things you can and cannot do in patient collections (legally anyway), and most of the most common legal efforts are ineffective. Patient collections needs to be re-considered.

Playing Hardball

The Rosenthal EffectYou tend to get paid what you expect to get paid. Getting paid is more about respect than money. People have money, they just aren’t paying you.

The Revenue Funnel LeakageIf you’ll think of your practice as a revenue funnel, then you have “leakage” in both your front & back office. Here’s how to fix them.


How I First Stumbled Onto This…I started selling for a collection agency.

Why do some practices not need an agency? Don’t all doctors have bad debt?”

I thought they meant they didn’t WANT to use an agency:Because they don’t collect much….a measly 10% on average.Because they cost too much…about 30% (which is ridiculous).Because they alienate and upset hard-earned patients!And because doctors end up writing-off most of those dollars anyways.

Then found a few doctors who didn’t need an agency at all. Wait, what?


No Need…At All?

It wasn’t an issue of want, but need.

There were a handful of doctors who actually didn’t NEED an agency?

But how they different than all the others?

What are they doing?


Looking for the “Magic Wand”So I started asking questions.Back-office…front-office…

What on earth are you doing to get patients to pay?

I just studied them. And their processes.

I’ve looked all over…and no one seems to be talking about patient collections. Why not? Too busy?

Everyone is focused on reimbursements, I guess.


The Common Thread I DiscoveredMost people think collections is about __________?

So I started telling other practices the “secrets” I discovered to see what would happen.

Would these triggers work for all kinds of practices? For all kinds of patients?

Money. The economy. High-Deductible Healthcare plans.

I don’t think so. People have money, they just aren’t paying you.


The Pushback Begins“Brad, you don’t understand, our patients are different.”

But maybe I’m wrong, so let’s test it.

What if you change the area, the specialty, the people groups, the sexes, the economic levels?

I don’t think so.Humans are humans, right?


The ResultsTurns out: Humans are humans everywhere.

@Buckhead OBGYN (an upscale OBGYN) - We saw them go from 27% in the 60 day column to 87% in just 6 weeks.

Of course recovery rates vary.But every time certain psychological triggers are introduced…Recovery rates go up and Days in A/R goes down!

@Goodwill Community Clinic (a lower-income clinic) - We saw their meager collections increase by 5x!


But The Fact Remains…

All of this business about who will pay and how much and when…

Is all psychological in nature (in most cases).


Want to learn how to re-train your patient base to actually pay you?

Reach out to me to schedule a FREE, personalized 20-minute consultation now.

Email me at…[email protected]

Brad McDaniel, MBA


Playing HardballThe Worst, Meanest Things Some Try To Do To Collect, & Which Ones Are Effective and Legal!


Mind Games: Wagging, Barking & BitingIt is mainly “wagging” and “barking,” not “biting” that gets people to pay.

If you could “bite” - what would that be exactly?

But let’s just ask the question…What is the worst thing you can do to a patient if they don’t pay their bill on time…legally?


Biting Options:You can’t yell, cuss, threaten, insult (FDCPA*)You can’t show up at their house or work (FDCPA)You can’t put them in Debtor’s Prison (sorry)

* The FDCPA, Fair Debt Collection Practices Act, won’t allow you to do these things (as fun or stress-relieving as they might be).


Stop service (if you can)

Ding their credit

Take them to court

So What CAN You Do?

- It’s time consuming, - No your agency doesn’t do this for you, - If the patient ever does pay you, it’s excruciatingly hard to reverse,- But the *real* kicker is that…Recovery rates go DOWN when you ding their credit.

- It’s time consuming, - No your agency doesn’t do this for you unless the balance is huge,- You will easily win the case, but all you will get from your trouble is a piece of paper (a judgement),- So the *real* kicker is that…Hardly any money is ever collected from court cases with patients.


Conclusion:

It might feel good to penalize people who don’t pay you (aka steal from you), but it’s not cost-effective.


Another Option:

What if you did nothing at all to change your patient collection strategies?

How long could you survive the current healthcare environment?


History of Medical Payments1970’s 100% Patient Responsibility.

Patients paid the doctor and then got reimbursed by the insurance company. (Remember those days?)

1980’s 20% Patient Responsibility.Doctors started filing claims, living off the 80% insurance money and didn’t care if the patients aid their portion.

1990’s2000’s

10% Patient Responsibility.Because the patient portion was not really pursued, the message was clear, “You don’t have to pay your medical bills.” So few did.

2010’s 0% Patient Responsibility.An entire generation of Americans have learned to not pay their portion, but with reimbursements plummeting, this must stop.

Today Who’s Responsible?The Exchanges, HDHPs & ICD-10 will bring massive confusion about what is and isn’t covered & how much to pay.


Doctors have lived off mostly insurance money for decades.Fact #1

Insurance reimbursements are plummeting yearly.Fact #2

This downward trend won’t be changing any time soon, right?Fact #3

Most patients haven’t been paying their portion for years.Fact #5

This is not working, and is certainly not sustainable.Fact #8

The patients owe an increasing balance. (35% by next year)Fact #4

Practices are losing money every single month.Fact #6

To survive, doctors have been cutting staff & borrowing.Fact #7

The Exchanges, HDHPs & ICD-10 only make it worse.Fact #9

The Tough New Reality for Doctors


This is what American doctors are facing.

Think I’m exaggerating?


The Urgent Burden of Debt

This chart shows the amount of

SBA-backed loan dollars borrowed by independent doctors from from 2000 to

2011

A 10-fold increase in just 10 years. Wow!How much longer, realistically, will this “quick-cash” kind-of-fix sustain these practices?


The Options?

1)Play the Ostrich (and deny reality)

4)Play the Sage (and get wise like other savvy doctors)

3)Play Dreamy Smurf (and fantasize of a pre-pay practice)

2)Play the Damsel (hoping hospitals/ACO’s will save you)


Bottomline:Maybe for the first time...

...or else!

Ever!

You have GOT to learn how to get your patients to pay their portion...


So how do you get patients to actually pay their portion?

Common Answers: Savvy Wisdom:“We’ll just try harder.” Leverage the…

- Rosenthal Effect- Frequency Effect- Soft Collections Effect

(click above to learn more)

“We’ll hire more staff.”

“We’ll get it upon arrival.”


Want to learn how to re-train your patient base to actually pay you?

Reach out to me to schedule a FREE, personalized 20-minute consultation now.

Email me at…[email protected]

Brad McDaniel, MBA