Increase In Patient Out-Of-Pocket Responsibility Negatively Impacting Hospital Net Revenue

Crowe Horwath LLP releases third-quarter hospital data analysis

The responsibility for healthcare costs continued to shift from insurers to patients in the third quarter of 2016, resulting in struggles with collection rates for healthcare providers. The shift is the result of more people participating in high-deductible health plans (HDHPs), as well as those who are moving from being uninsured to being insured following the enactment of the Affordable Care Act (ACA).

This data came from Crowe Revenue Cycle Analytics (Crowe RCA), a benchmarking solution from Crowe Horwath LLP, one of the largest public accounting, consulting and technology firms in the U.S. Crowe RCA compiles and organizes a daily feed of transactional-level data from the patient accounting systems (PAS) of more than 660 hospitals. The quarterly Crowe RCA Benchmarking Analysis, “Patient Financial Responsibility on the Rise: Providers Face Net Revenue Impacts,” details the analysis of data examined through Sept. 30, 2016.

In the past year, insured patient responsibility has grown from 23.3 percent to 26.9 percent for outpatients and 10.2 percent to 12.1 percent for inpatients. According to Brian Sanderson, managing principal of Crowe healthcare services group, healthcare organizations are struggling to collect the increased share of payment due from individuals. Due to lower collection rates for patient responsibility dollars, compared with insurance payer responsibility dollars, overall managed care net revenue has been reduced by 2.5 percent for outpatients and 1.4 percent for inpatients, assuming contract rates were unchanged between Q3 2015 and Q3 2016.

“As patient responsibility continues to increase, it’s imperative that healthcare organizations establish effective point-of-service collection programs by training and educating front-line staff,” said Sanderson. “Hospitals should leverage large data sets for patient propensity to pay – to identify self-pay after insurance collection opportunities, set departmental collection goals, and track and monitor their performance against industry benchmarks.”

For more information or to download a copy of the Crowe RCA Benchmarking Analysis, please visit www.crowehorwath.com/benchmarking-release.

About the Crowe RCA Benchmarking Analysis
The Crowe RCA Benchmarking Analysis includes 660 distinct hospitals classified as acute, critical-access, rehabilitation, psychiatric or cardiovascular care facilities. The database contains information from hospitals in 42 states, with 20 or more facilities represented in Colorado, Florida, Illinois, Indiana, Kansas, Kentucky, Minnesota, Ohio, South Dakota, Texas and Wisconsin.

About Crowe Horwath
Crowe Horwath LLP (www.crowehorwath.com) is one of the largest public accounting, consulting, and technology firms in the United States. Crowe uses its deep industry expertise to provide audit services to public and private entities while also helping clients reach their goals with tax, advisory, risk and performance services. Crowe is recognized by many organizations as one of the country's best places to work. Crowe serves clients worldwide as an independent member of Crowe Horwath International, one of the largest global accounting networks in the world. The network consists of more than 200 independent accounting and advisory services firms in more than 130 countries around the world.