Consumers love to hate debt collectors. And that relationship is understandable, if not entirely rational. If you’ve got financial problems, self-inflicted or not, why would you want to be reminded of them? The situation is inherently adversarial from the get-go.
Many people engage in rather simplistic, black & white arguments about this unglamorous aspect of our economy, with one side claiming (loudly) that debt collectors are “all out of control” and should be subject to even stricter limits on when, where, and how they can ask for payment (above and beyond existing state and federal consumer protection regulations), and the other side arguing that Americans must be held accountable for their financial decisions, and that the law should not be used as an excuse to avoid paying a legitimate debt.
Within this debate, the specific issue of medical debt is unique for many reasons, including the role of the healthcare service provider in local communities around the country.
Tom Gavinski, vice president, Healthcare Division at IC System, a major U.S. collection agency, offers insight into two of the groups essential to this debate: medical providers and their outsourced debt collection partners. He writes:
The recent “Great Recession” has changed the way healthcare collectors have approached their jobs. Today, many good people have experienced economic hardships due to loss of employment or a reduction in personal income. The old strategy of demand collection just doesn’t work when patients with overdue medical bills simply do not have the means to pay. Many of today’s delinquent patient accounts are not the result of patients who “overspent” or who had mismanaged their finances; rather, many of these individuals and families happened to fall ill or were otherwise injured while at the same time incurring job or insurance loss, or facing simple inability to obtain affordable health coverage—or any coverage at all.
Many healthcare providers have adopted a new strategy when dealing with these patients, placing customer service as the primary objective and debt collection as a secondary priority. Debt collectors’ titles have been changed to “Financial Counselors” and their collection strategy seeks to achieve a “win-win” philosophy that is mutually beneficial to the provider and the patient. Financial Counselors become problem solvers and consultants to patients, rather than pushy or demanding bill collectors. This approach preserves the reputation of the healthcare provider in the community while helping the delinquent patient find solutions to his or her problem.
Healthcare providers are very concerned with their image in the community. There is extensive public pressure to ensure that the mission of the healthcare provider is to heal the person, not to inflict hardship upon the patient. The nonprofit healthcare sector is especially sensitive to public scrutiny, with federal and state regulators monitoring their charitable activities and media outlets actively reporting aggressive collection practices. No healthcare provider wants to be in the crosshairs of regulators, the media, or ambulance-chasing lawyers.
At a recent conference I attended, one VP of Revenue Cycle explained his organization’s expectations of his outsourced collection partners. He said he expects them to be caring, compassionate, and competent organizations, and the same expectation extends to every person that works there. Healthcare collection partners must mirror the mission and vision of the healthcare provider they provide services to. Partner companies’ employees must convey a passion for placing the patient first and finances second in their collection strategies.
This strategy shift became apparent to me recently, as my current firm began working with a large nonprofit healthcare organization on a significant collection project. The healthcare organization made it clear that our primary focus in the collection effort was customer service first and collections second. That does not mean we don’t ask for legitimate payment, but we do not hound, badger, or become demanding with the patient. We are very professional, caring, compassionate, and competent in asking for payment. The healthcare provider is very concerned about public image and media scrutiny. All of our calls are recorded and randomly reviewed for quality control by the healthcare provider to ensure our compliance with its expectations. Our collectors have been trained both by us and by our client. By incorporating the provider’s expected collection practices and scripts we have experienced a very low complaint rate from out client’s patients. And because collection results are aligning with client expectations, we are achieving superior liquidation results with low patient complaint volumes.
In spite of the negative attention so many areas (including the healthcare sector) of the collection industry receive when complex interactions are dumbed-down into absolute black or white terms, legitimate collection activity (and desired recovery performance) will come naturally when a patient-centric, customer service approach is followed… and without unnecessary headline risk for hospitals, clinics, and other healthcare providers.
Tom Gavinski is vice president, Healthcare Division, at IC System, which has provided accounts receivable management services to its clients since 1938. He lives and works in Minnesota.
Michael Klozotsky is managing editor of insideARM.com, the most credible source of news and opinion for the professional accounts receivable management (ARM) industry.
