Increased patient footfall is bringing big benefits to doctors’ private practices – but many face challenges as a result. Simon Brignall highlights the problems and discusses what you can do.
The recovery from the pandemic has proved to be a boon to the private practice sector.
Many patients are turning to private healthcare due to the pressures on the NHS and much of this increased demand is coming from self-payers.
Older patients, many who had never interacted with the independent sector before, have chosen to dip into their life savings to fund treatments.
They have been more insulated from the recent financial pressures and at the same time have benefited from impressive increases in property prices over recent decades.
There are also greater quality-of-life expectations as bucket-list holidays to Machu Picchu replace trips to the bingo.
At my company, Civica Medical Billing and Collection, we have seen self-pay increase by more than 50% as a percentage of the invoices we have raised since 2019. And some practices has seen more than a 100% increase.
Privately insured patient activity has also remained strong. The combination of the ability to work from home and Government support meant we did not see the redundancies we have seen in previous downturns in sectors whose benefits include private healthcare.
All of this has meant we are seeing record invoicing from our consultants as they easily exceed their 2019 billing levels. This all sounds great so what is the problem?
Managing growth can be challenging and it is often when practice activity increases that problems arise.
Initially, these can be masked because everyone involved is busy just trying to manage patient demand. But it is not long before cracks start to appear.
Often consultants will suspect that, despite their increased work hours, the effort is not materialising in the practice cash flow.
For many, aged and bad debts are steadily increasing and some patients may even be complaining they have not received a bill at all.
Listed below are some of the issues we are seeing – and some solutions.
The medical secretary is the bedrock of any successful practice, but they can quickly become overwhelmed when a practice sees increased activity.
Many secretaries work for more than one consultant and if they are experiencing the same increases in patient numbers across all the practices they manage, then problems can arise.
Even if they manage to stay on top of the billing, tasks such as reconciliation and chasing are often set to one side and that leads to cash flow and bad debt trouble.
Medical secretaries are expected to wear many hats, including receptionist, personal assistant, sales ledger clerk, insurance guru, credit controller and debt collector.
This can be challenging and not many individuals have the combined skill set required to find the time to complete all these tasks perfectly.
Their tasks can be near impossible task for one person to cope with, especially as the practice expands.
We find that, once the practice reaches a certain size, the secretary is so busy dealing with the patients and the medical side of things that the billing and collection often gets neglected.
Many inquiries we receive are not from consultants but from medical secretaries who are feeling overwhelmed and require assistance. It is important to ensure your medical PA is on top of the increased activity and has all the support needed.
Outsourcing the medical billing and collection side of the practice to experts ensures practice finances are in good order. And there is the added benefit of the secretary enjoying more time to look after all the other elements of running the practice.
This often results in revenue increases as new patient inquiries are handled more efficiently. We ensure we form a strong partnership with the medical secretary, as we understand the differences in our separate roles and how we can effectively work as one team.
It is also good practice to split the medical and business side of things. The secretary’s conversations with patients are then focused on clinical needs and if the secretary leaves, then their replacement will be less stressful with minimal impact to the practice finances.
Raising prompt invoices is obviously important. But in very busy practices it is not uncommon for them to fall behind by weeks and even months.
That reflects badly on the practice, can negatively impact the patients’ view of their treatment and also means the cash flow suffers. The longer the delay in raising an invoice, the greater the risk it results in a bad debt.
Some medical insurance companies now have strict time limits, typically six months, in which they need to receive an invoice; otherwise they will not pay. Effectively, you could end up treating these patients for free.
Invoice promptly and you will also be aware of any issues and be able to improve your chances of satisfactory resolution.
To ensure good cash flow and minimise bad debts, as a good rule of thumb, the practice should set the goal of billing within 24 hours of any treatment.
Control your debt
The most common complaint I hear from practices who, even if they are on top of the billing, is around the reconciliation and chasing of outstanding payments.
This is often due to a mixture of shortfalls/excesses from insured patients, delays in payments from insurance companies and outstanding self-pay invoices.
Many practices reach out to us for this reason, often citing that the growth in demand has exacerbated this problem. We regularly speak to practices who have 20% or 30% of their annual income outstanding for this very reason, many with bad debt levels of 5% or more.
Practices often fall behind with the reconciliation process or have not reconciled remittances correctly.
Consultants regularly complain they do not have visibility on the practice finances, making them unsure about the true picture of their outstanding debt.
Lack of transparency at this key stage means it is impossible to have an effective chase process. Our clients, however, have access to up-to-date accurate data via a reporting dashboard.
It is important that all payments received must be reconciled in a timely fashion. This includes self-pay patients who may be paying by card, bank transfer or cheque.
For insured patients, each insurer sends a remittance to the practice when it makes payment. In busy practices, this can be challenging because it is common for a remittance to be mislaid or not received.
So the invoices remain outstanding unless the practice is chasing the insurer or regularly reconciling their bank account.
That can lead to further problems from a shortfall being identified, which requires an invoice to the patient. Invoicing months after the event is never a good thing, as it can lead to complaints from unhappy patients and make them more reluctant to pay.
For a robust chase process to be effective, it must be clearly defined and routinely applied. There needs to be clear understanding who is responsible for this role so they are accountable.
Once it has begun, it needs following up or the patient may think you are not being serious and feel they have permission to withhold payment.
Chasing should allow for a mixture of communication methods to contact the patient as well as the sending of formal letters. All this need recording with a log of any action taken.
I’m pleased to say our robust reconciliation and chasing process ensures we have a bad debt rate of as low as 0.3% to 0.5%.
Simon Brignall (right) is director of business development at Civica Medical Billing and Collection