Patient Relations Central to Healthcare Debt Sales

Healthcare is a difficult and sensitive field for debt managers as the field grows, according to experts on two panel presentations covering the topic last week at the Debt Connection Symposium and Expo 2007 in New York City. 

The first panel, “Healthcare Bad Debt: Foundations for Success in Provider-Agency Partnerships,” included speakers Tom Gavinski, vice president of healthcare, I.C. System; Todd Cole, director of patient accounting, TriHealth Inc.; and Meg Reichardt, manager of patient services, University of Rochester Medical Faculty Group.

Cole noted that “Healthcare is fundamentally different from most other goods and services. It is about the most human and intimate needs of people, their families and communities.”

The other panelists echoed that view, noting that healthcare creditors must confront a rising tide of uncompensated care and self pay populations, increasing charity care allocations and uninsured discounts, the complexities of insurance verification, and decreasing revenues in the face of increasing costs.

Yet even under these burdens, healthcare providers must understand that they operate within communities, and unlike some other forms of bad debt, healthcare collections remain directly tied to superior customer service, as hospitals and clinics seek to preserve provider-patient relationships.

The second panel, “Healthcare Financial Management Debt Sales,” included speakers Rob Knight, vice president of business development, Asta Funding and Cole of TriHealth.

Both speakers discussed healthcare debt sale strategies from both buyers’ and sellers’ perspectives, noting that hospital systems must decide not only what to sell — for example, does the sale of Medicare accounts make good public relations sense, even if it makes sound financial sense? — but also when to sell.

Cole noted that in early 2003 when TriHealth began selling bad debt accounts, its criteria for selecting a business partner focused on quasi-intangibles such as professionalism, responsiveness to complaints, and prior medical bad debt experience.  Now as TriHealth and other healthcare creditors like it sell debt on a quarterly basis, those criteria have shifted to minimizing operational burdens and maximizing price, all while keeping patient customer service at the forefront of bad debt sales.

Michael Klozotsky, research analyst, Kaulkin Ginsberg Co., moderated both panels. The Symposium was held at the New York Marriot Marquis September 5-7, 2007.