Percent of Revenue from Patients

Why Patient Engagement & Patient Collections Cannot be Ignored

The freight train trend of high deductible health plans continues to put more responsibility on the patient as well as putting more pressure on healthcare organizations to adapt to their processes and procedures to engage patients and collect patient responsibility balances.  The trend is not going away.  In fact,  Aetna CEO Mark Bertolini expects patient responsibility to reach 50% before 2020.

Traditionally medical organizations have been good at collecting insurance balances despite a myriad of complicated issues.  However, the current state of healthcare revenue cycle management is that medical organizations are losing between 50-79% of patient responsibility balances.  That’s a big deal all by itself but what makes it a critical challenge is that a full 30-35% of  a healthcare organization’s revenue is now coming from patients.  With the average medical group’s profit margin less than 13% addressing patient balance issues is mission-critical.  It can mean the difference between being profitable or being unprofitable.  It has to be addressed.

Percent of Revenue from Patients

The percentage of revenue coming from patients is now 30-35%.

Additionally, just making the changes necessary to efficiently collect patient balances is only part of the equation, because when large portions of the balance (or even the entire balance) is coming from the patient there are a whole new set of dynamics that healthcare organizations must deal with that few are prepared to address right now as we have discussed here.


The part of patient engagement that no one is talking about.

Taking the discussion further Sean Biehle recently commented on this dynamic in his article “The Elephant in the Waiting Room: Healthcare Organizations Can No Long Afford to Look the Other Way on Patient Pay“.

He comments on many of the other dynamics related to patient engagement and what should be done.  On the high-deductible trend he notes:

  • A 2012 Rand research brief estimated that half of all workers on employer-sponsored health plans could be on high-deductible insurance within a decade.
  • The average deductible in employee sponsored health plans was $1,100 in 2013, but deductibles in the healthcare exchanges average between $3,000-$5,000.
  • A report releaseds by S&P Capital IQ estimates that 90 percent of S&P 500 companies will shift their workers from employer-sponsored insurance plans to health exchange plans by 2020.

And then he makes the same point I have made above:

As more Americans are paying a greater proportion of their healthcare costs out of pocket, getting reimbursed for the patient pay segment could now be the most important number to a healthcare organization’s bottom line. Collecting from patients is estimated to cost up to three times more than collecting from payers.

This is where we are today and as high-deductible plans and health savings accounts grow the issue will only become larger.  Healthcare organizations need to take two steps immediately to address the challenge:

  1. Develop efficient policies and procedures for collecting patient balances.
  2. Engage patients at a level (and in ways) that they have never done before.

This dynamic has the potential to be a game changer for the healthcare organizations that can excel in these two areas.  Time will tell who the winners and losers will be.  It a whole new ballgame.

– James