Small Percentage of Uninsured Patients Generate Most of Hospitals’ Self Pay Revenue
TransUnion Healthcare findings reveal that hospitals may be leaving millions on the table when their revenue cycle isn’t optimized
A TransUnion Healthcare (NYSE: TRU) analysis found that 30% of self-pay accounts – those patients without health insurance or those that have a patient balance after insurance – will generate more than 80% of the self pay revenue collected by hospitals. TransUnion released this information as part of a campaign to highlight the importance of healthcare insurance discovery.
The findings are significant because the number of patients without health insurance increased to more than 12% at the end of 2017. Furthermore, Patient Balances after Insurance (PBAI) have been steadily rising – increasing from 8% of the total bill responsibility in Q1 2012 to 12.2% in Q1 2017.
Following years of decline since the Affordable Care Act was passed in 2010, the uninsured rate grew from 10.9% in Q4 2016 to 12.2% in Q4 2017. As a result, hospitals are taking a much closer look at cost control measures; however, they still may be missing the most important part of the picture: an optimized revenue cycle which ensures earned revenue becomes paid revenue.
This presents a clear opportunity for hospitals to obtain revenue from accounts that are most likely to be paid in full. More opportunities may exist on such accounts as between one and five percent of self-pay accounts that are written off as bad debt actually have billable insurance coverage.
“Re-evaluating a hospital’s current approach can be a challenge for revenue cycle leaders, but it can result in a great reward by maximizing the healthcare providers’ overall return,” said Dave Wojczynski, president of TransUnion Healthcare. “Determining which patients or accounts may present the best opportunities for payment is just one way a healthcare provider can increase their chances of maximizing reimbursements for services rendered.”
While some hospitals are improving their profitability via cost cutting, new research also shows that optimizing revenue cycle procedures may be of even greater benefit. In 2018, cutting costs was the highest priority for 63% of hospital C-suite executives, according to a Premier survey. Yet, a recent Advisory Board study indicated that the typical 350-bed hospital may be leaving $22 million on the table by focusing on cutting costs over optimizing their revenue cycle.
“It’s important for hospitals to have systems in place that can holistically address both profitability and revenue leakage,” added Wojcyznski.
TransUnion Healthcare’s Revenue ProtectionSM solutions, including its Insurance Discovery solution, help hospitals prevent revenue leakage by engaging patients early, helping to ensure earned revenue gets paid and by optimizing their collection strategies. The company works with more than 1,800 hospitals and health systems and has protected over $4.4 billion in net revenue to date for its entire client base.
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About TransUnion Healthcare
TransUnion Healthcare, a wholly owned subsidiary of credit and information management company TransUnion, is a trusted provider of Revenue ProtectionSM solutions that help providers collect more cash up front and throughout the revenue cycle, and identify and maximize reimbursement opportunities to reduce bad debt. By leveraging our data assets, market-leading revenue cycle management technologies, and deep insights into consumer financial behavior, our customers are better enabled to reduce uncompensated care, engage patients early and improve cash flow. www.transunionhealthcare.com
About TransUnion (NYSE: TRU)
Information is a powerful thing. At TransUnion, we realize that. We are dedicated to finding innovative ways information can be used to help individuals make better and smarter decisions. We help uncover unique stories, trends and insights behind each data point, using historical information as well as alternative data sources. This allows a variety of markets and businesses to better manage risk and consumers to better manage their credit, personal information and identity. Today, TransUnion has a global presence in more than 30 countries and a leading presence in several international markets across North America, Africa, Latin America and Asia. Through the power of information, TransUnion is working to build stronger economies and families and safer communities worldwide.
We call this Information for GoodSM.