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Segmenting Hospital Accounts to Maximize Cash. March 22, 2011 Garett Jackson, CFO HCA National Patient Account Services. Learning Objectives. Understanding the Self Pay Portfolio How predictive models were incorporated into the process

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segmenting hospital accounts to maximize cash

Segmenting Hospital Accounts to Maximize Cash

March 22, 2011

Garett Jackson, CFO

HCA National Patient Account Services

learning objectives
Learning Objectives
  • Understanding the Self Pay Portfolio
  • How predictive models were incorporated into the process
  • What variables are within the data already obtained from the patient?
  • Future state of modeling and segmentation
  • Translating data into results
front end copay responsibility shift
Front-End: Copay Responsibility Shift

Insurance plans are paying less of the overall bill. Hospitals are left to get the remaining portion from the patient.

Gains upfront are not offsetting the increase in responsibility

front end efforts self pay
Front-End Efforts – Self Pay

More of the original balance was discounted.

Front-end collections from the patient are decreasing at the same time.

negotiation what to expect
Negotiation: What to Expect

82% of SP calls don’t commit to pay

collections life cycle
Collections Life Cycle

Bad Debt

Collection Agency

Payment from credit reporting

Payment from legal actions

Payment from aggressive collection activity

Identified as collection agency

Back Office (Early Out)

Payment from letters

Payment from contacts

Payment from re-billing

Customer Service Focus

Identified as Facility

Front End Collections

Pre-admit payments

Payment at registration

Payment at discharge

Payment from billing

Mission Based Collection Practices

NPAS Statistics

hca s bad debt action plan
HCA’s Bad Debt Action Plan
  • HCA started implementing its Bad Debt Action Plan in an effort to understand and attack the issue quickly. Early out was a key focus of the plan:
    • What does the healthcare portfolio look like compared to other industries?
    • Is it possible to change the early-out collection strategy to address the portfolio?
    • Which resources (up-front, early-out, primary) are best equipped to handle the inventory?
    • Which key indicators have the largest impact on collections?
credit scoring notes
Credit Scoring Notes

Used the Equifax ERS 3.0 scoring method, which ranges from 1 to 1000

Grouped number of accounts in scored index ranges of 100

Scores of 0 mean that no data was available

Scoring vendor provided six industry comparisons done by Equifax

Compared results against All Industries, Auto Finance, and Bankcard Industries

Work Effort is defined as Attempts, Contacts and Letters

Self Pay was analyzed for comparative purposes. However, the study compares Copay and Deductible in general.

Scoring vendor provided scores for approximately 241k accounts with a 96% score rate

Used a random sample of closed accounts

Statistical accuracy of sample is 95% +/- 4% as a valid representation of our inventory

keys to implementation of scoring
Keys to Implementation of Scoring
  • Tools: Do you have the right tools to manage workflow with a score?
  • Workflow: Determine what will be done with the score ahead of time
  • Segmentation: What accounts will be scored? Cost can be an issue.
  • ROI: What will happen to FTEs that might be working these accounts?
  • Risk Tolerance: There will be accounts that are not correctly predicted
  • Board Acceptance: Charity and Bad Debt processes require approval
goals of predictive modeling
Goals of Predictive Modeling
  • Utilize the right resources for working accounts
  • Minimize the need for external information to determine the best segmentation philosophy
  • Business Analytics – will a predictive model support a conclusion driven by something other than data?
how to use a predicted value
How to Use a Predicted Value



Predict Probability

cost reliability of models
Cost-Reliability of Models

Timing Relevance

Data Relevance

hca s results measuring success
HCA’s Results - Measuring Success

Secondary Champion-Challenger with BPO partner. Used same technology and same processes, but BPO allowed to hire, train and manage own staff.


HCA processes performed 18% better than the BPO on an alpha-split champion challenge over a one year period.

Of the 40% Lift over external vendors, HCA can attribute 18% to people management, or roughly 45%.

  • National Patient Account Services

2700 Blankenbaker Pkwy Ste 100

Louisville, KY 40299

  • 1-866-882-3582
  • Garett Jackson, CPA
    • Chief Financial Officer
csps must overcome objections
CSPs must Overcome Objections
  • Reasons Why People Object:

1.Avoidance 2. Confusion 3. WIIFM

  • Types of Objections

1. Feeling 2. Fact 3. Hidden

  • Remember the six steps to overcome objections:

1. Listen 2. Empathize

3. Explore and Probe 4. Agree

5. Playback 6. Solve

negotiating for money
Negotiating for Money


  • Make sure you are not automatically setting due dates out 30 days
      • Post Dated/Recurring Checks
      • Balance Resolutions
  • Explore Non Linear Resolutions
      • Before issuing a final notice make sure you explore a non linear arrangement. Ask probing questions! It’s possible that the customer’s current situation may only be temporary
  • Negotiate!
      • Statistics show that 97% of the cash collected comes from accounts that pay in full.
      • Settlement offers do not have to automatically be max %
      • Negotiate in increments
  • Sixty months is not always the right amount of time
      • Make sure that 60 months is your last option!
      • Remember this option exists only as a LAST OPTION
other payment sources
Other Payment Sources
  • Selling A/R
    • Cash infusion for best credit accounts only
    • Ensure a low-cost effort is done prior
    • Lots of players entering market, some are losing money
  • Longer Partial Payments
    • Time/value of money is irrelevant if you don’t receive payment
    • Collection agencies charge between 10% and 35%
  • Partially Paid Settlement
    • Combination of partial payments and settlements
    • Traditional settlements require a large one-time payment that does not usually help a cash-strapped GN
    • Negotiation of both what the amount needs to be, and how long to pay it off are the two basic tenets of a financial transaction.