The Link Between Patients, Healthcare Providers, and Community Banks

The patient lending platform (PLP) model is increasingly being seen as a source of fiscal aid in a time of razor-thin profit margins.

“First do no harm” is a tenet often heard in healthcare. In today’s environment, the same promise should certainly be extended to the payment arena: do no harm to the patient’s pocketbook.

In a recent Modern Healthcare article, it was stated that CEOs are struggling with the status quo. This could be considered true across the healthcare continuum. It is a constant challenge to maintain a healthy cash flow in the industry. The challenge has only escalated in light of COVID. Typically, healthcare providers work on extremely small profit margins. These challenges have become even greater for rural health providers, as well as critical access providers. 

Stepping outside of the status quo and exploring opportunities to provide innovative and efficient care without having to expend countless hours on payment collections might sound like a tale from an alternate universe. However, it can become reality when a patient lending platform (PLP) is introduced to streamline the process of payment and collections. A PLP is a relatively new concept that has offered relief in the healthcare environment, particularly in rural areas and/or small communities.

PLPs partner with healthcare providers and community banks to reduce the financial burden on patients while quickly offering cash solutions to providers. The transactions allow providers to receive immediate payment, while patients are allowed to pay back the bank in time-based installments at low interest rates. Patients are essentially in control of the loan terms, which allow affordable repayment of healthcare costs. PLPs allow patient-provider financial transactions to run “in the background,” thereby promoting efficiency and tremendous cost savings as the burdensome collection work typically done by staff is offloaded to a local bank partner.

For banks, this can provide a unique lending opportunity: an additional interest revenue stream with a low customer acquisition cost. When it comes to patient collections, revenue cycle management (RCM) companies are an integral part of the overall process. If a claim is not fully adjudicated, RCM works with the insurance company to remediate issues, as appropriate. It is not uncommon for a well-versed professional in the RCM space to support a patient’s understanding of their bill and/or Explanation of Benefits (EOB). Even after a claim has been fully adjudicated, RCM can lend its expertise to ensure that it is adjudicated correctly. An inaccurate bill is certainly not considered an infrequently encountered event.    

In February 2020, CNBC reported that 32 percent of American workers have healthcare debt, and 28 percent owe more than $10,000. On average, 55 percent of uncollected healthcare revenue is a patient’s responsibility. Almost half of those surveyed defaulted on their medical bills. As health insurance deductibles and co-insurance rates continue to increase, so does the financial and administrative burden to hospitals. 

Within healthcare, we have broadened our horizons, moving toward artificial intelligence, natural language processing, computer-assisted coding, and other technological advances. Claim adjudication is routine in healthcare organizations. However, when the automated process uncovers a problem, human intervention is required, which only prolongs the time until the healthcare organization is paid.

Several case studies have shown a decrease in accounts receivable and an increase in patient and employee satisfaction after implementing a PLP. Perhaps it’s time to look at alternative solutions for bridging the worlds of hospital revenue collection and affordability for patients. The knowledge, expertise, and attention to detail a RCM professional offers adds immeasurable value in streamlining the PLP and improving the overall healthcare experience.

Programming Note: Listen to Susan Gatehouse today on Talk Ten Tuesdays, when she co-hosts the weekly Internet broadcast with Chuck Buck at 10 a.m. EST.