How Patient Financial Advocacy Can Help Save Rural Hospitals
By David Shelton, PatientMatters
Rural hospitals are the lifeblood of many communities in America. Not only do they provide essential healthcare to nearly 20 percent of the nation’s population, they create jobs, fuel local economies and are often dynamic hubs connecting residents to community and social services. As vital as rural hospitals are to our society, however, many are struggling—unable to sustain profitability amid shrinking patient volume, heavy reliance on lower-reimbursement government payer programs, workforce shortages and rising rates of uncompensated care.
The rate at which rural hospitals are closing is alarming. In the seven years from 2005 to 2011, 50 rural hospitals in America closed. In the eight years from 2012 to 2019, the number more than doubled, with 105 rural hospitals buckling under financial pressure. Of the survivors, almost half operate at a loss and 21 percent are at high risk of closing unless their financial performance improves dramatically.
The Realities Of Healthcare Coverage In Rural America
Of the many issues contributing to rural hospitals’ demise, uncompensated care is significant. Because there are fewer buyers in rural areas, commercial health insurers offer limited, if any, options. Premiums tend to be higher, which means fewer people can afford insurance. In 2017, more than nine percent of people living in rural areas lacked insurance of any kind.
On average, rural Americans rely on Medicare and/or Medicaid for coverage and are more likely to churn between Medicaid eligibility and ineligibility, especially in states that did not expand the program to cover more low-income Americans. This heightens the potential for coverage gaps, disruptions in care and patients forgoing care entirely, perpetuating the cycle of poor health outcomes.
Low health literacy and access to transportation, coupled with a lack of consistent internet and cell phone connectivity, make it more difficult for rural consumers to find and understand insurance coverage options and what they may qualify for. People may also hesitate to seek healthcare information out of fear, frustration with the healthcare system or concerns about privacy in close-knit rural communities.
Patient Collections: A Sure Step To Recovery
While rural hospital closures have been on government and healthcare industry radars since the late 1980s, the sudden uptick in recent years refocused attention on the problem and is spurring possible new solutions. Many, such as legislation to ease regulatory burdens, telehealth programs and expanded Medicare graduate medical education (GME) funding, are worthwhile, but could take months or years to come to fruition. Rural hospitals do not have the luxury of time; they must act quickly to reverse current trends.
Increasing up-front patient collections to reduce uncompensated care write-offs is a relatively simple way for rural hospitals to immediately generate revenue and boost the bottom line. One effective approach is to designate a patient advocate to connect uninsured and underinsured patients to federal, state, local and third-party medical benefit programs and ensure they can access the care they need. This means training or outsourcing staff to conduct bedside screenings; researching funding sources such as Medicaid, Social Security, disability and workers’ compensation; and following the process to completion for inpatient, outpatient and emergency department cases.
Another way to increase patient collections is to shore up registration and financial processes for insured patients. Research shows rural residents are more likely to have high out-of-pocket healthcare costs relative to income because of high deductible health plans and cost-sharing requirements. To help ease patients’ financial burdens and increase the likelihood of getting paid, rural hospitals should develop capabilities to provide accurate bill estimates, confirm insurance eligibility, determine patients’ propensity to pay and offer multiple financing options. Educating patients and streamlining the financial part of healthcare have been proven to increase cash collections and patient peace of mind.
The Advantages Of Advocacy
Dedicating resources to patient financial advocacy and patient experience activities can help rural hospitals recover funds they would otherwise fail to collect. It can improve key performance indicators (KPIs) considered crucial to survival, including bad debt, accounts receivable (A/R) days, reimbursements, Medicaid Disproportionate Share Hospital (DSH) payments, initial claim approvals and appeal success rates. Ultimately, it can help save the rural hospital, the institution millions of Americans rely on for healthcare, economic vitality and community services.
About The Author
David Shelton is CEO of PatientMatters.