The payment is one of the most opaque, pernicious and costliest pain points in healthcare today. This is generally true across the industry, but our research has found that the behavioral health vertical suffers the most “pound-for-pound” given the level of patient financial responsibility (“PFR”) and low historical collection rates on these dollars.
We were shocked to find that on average, as little as 17% of the dollars that the patient owes were actually being collected. When we dug deeper, we found the following to be true:
1. Behavior health facilities still run their businesses on insurance dollars. Insurance used to cover 90% of care but is shifting to 70% which is not enough to run a profitable business
2. Admissions managers have adopted the “heads in beds” mentality, optimizing for occupancy rates instead of taking into account what makes a good patient, bothering to “level-set” on cost, or optimizing appropriate payment plans
3. If you’re an addiction treatment facility, you don’t have the time or resources to be calling upon patients or patient champions to collect payment. And even if you had the resources, no one wants to be in that business
4. Given the opacity of healthcare costs, it’s difficult to even have a conversation about what the patient owes because those data points are rarely available at the point of admission
In summary, i) facilities do not have the time/resource to collect, ii) do not want to be in the collections game (and even if they did — do not understand and appreciate the proper strategy for estimations and collections, which can be complex), ii) admissions managers are focused (and typically compensated) on “heads in beds” which is the wrong metric, and iv) estimating PFR is difficult which leads to an avoidance of having a conversation and increasingly deferral of care. Above all else, this leads to an awful patient financial experience!
But what if there was another way?
After canvassing the technology landscape for solutions helping behavioral health facilities manage the patient financial experience, we were lucky enough to find and partner with the market leader, FinPay.
The Company’s platform improves patient financial (and overall care!) experiences while significantly increasing the percentage of payments captured by the provider. In fact, customers of FinPay have grown EBITDA by ~20% simply through improving patient collections which on average rise from 13% to 82%. This is MASSIVE and what got us excited to invest — we had never seen such a high ROI solution in this space (after speaking with dozens of tangential vendors in the space).
The business has taken a fully managed approach thus far that we call “do-it-for-me automation” which we believe is critical for the constituents we cater to. FinPay is not providing the tools to collect more dollars (although they can), they are providing real hard-dollar savings and doing all the heavy lifting on their end (a precise combination of payment specialists, technology and playbooks).
Specifically, the team at FinPay does this through orchestration and optimization of the pre-care patient financial experience via providing immediate access to care specialists who are armed with real-time patient and insurance-related information, targeted provider financial policies, and pre-configured patient payment programs. The platform injects further intelligence into the patient financial conversation via consumer protection compliance tools, capacity-to-pay scoring, patient financial management analytics and situational risk stratification capabilities.
In simple terms — the platform does two things — i) it greatly improves the patient experience through immediate, transparent and straightforward communication surrounding the patient financial responsibility and ii) optimizes patient admissions and payments. The solution value is twofold: i) superior patient experience and ii) more (and higher margin) revenue for the healthcare facility.
Third, there is an additional efficiency gain through care provider staff not needing to spend time on financial conversations. Left to their own devices, healthcare facilities are simply not active in pursuing out-of-pocket medical expenses, leaving significant potential revenue on the table (especially as out-of-pocket medical expenses are on the rise).
After more than 85,000 patients and over $340 million in patient financial responsibility risk, FinPay has achieved the following results:
We look forward to continuing to support FinPay’s growth with the aim of assisting as many providers of behavioral health services with best-in-class patient financial management and PFR collections.