With $140B In Medical Debt, Doctors Saying ‘I’ll Bill You’ Doesn’t Cut It Anymore

Healthcare has a $140 billion unpaid bills problem – and it’s growing, Rectangle Health CEO Dominick Colabella told Karen Webster in a recent conversation. Every minute that practitioners spend trying to collect those funds, the price is going up – and the amount of money going back to care providers’ coffers is going down. But the most impressive thing about that $140 billion price tag isn’t its size or the speed at which it is growing – it’s how much of it could simply be avoided if care providers were willing to change their conversations with patients about their payments.

Instead of subjecting patients to the three most terrifying words in the medical payments experience – “I’ll bill you” – they could just clean up the process and make the payments part of the interaction clearer from the start by telling the patients what they will pay, and then putting the tools in place to make those payments seamless.

“You have to have really spectacular driving tools and modalities for payment so that the patients are engaged and it’s easy,” said Colabella. “You get the procedures and can even add some new ones to grow your practice. And you have an opportunity to have a thriving practice in place, instead of a practice that’s growing its AR every single day.”

Fixing The Process From Day One

To rehabilitate the parts of medicine where unpaid bills are raging out of control, Colabella noted, it is instructive to look at the places where the problem doesn’t exist. For voluntary procedures and treatments – cosmetic dentistry, plastic surgery, dermatological procedures and the like – consumers pay wholly out of pocket, so the conversation about cost happens upfront.

“Nobody is performing a plastic surgery or cosmetic dermatology procedure without being paid upfront,” Colabella noted. “There is a little iPad in the room for consenting to what you owe. You don’t go to a massage therapist and not pay. So when you look at all of these, there’s a lot to be learned.”

The resistance to having the payments conversation earlier in the process happens in places like primary care provisions and practices that have ongoing relationships with consumers. The attitude is that there is no need to bother the consumer with questions about payments, as they will be back – and practices assume they know their patients well enough to know that they will pay … eventually.

But those practitioners don’t realize that the experience is actually counterproductive to their relationships with patients. By pushing payments out and making the process mysterious, they aren’t improving their lives – they are just making it harder for them to pay even though they actually want to. And that makes it more likely that they’ll go looking for a provider who can offer a process that is far more flexible and transparent.

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Embracing The Change

The problem with trying to solve a problem, Colabella noted, is that there is almost no way to do it without having to make some real changes to the process. And healthcare is not a space renowned for its openness to change. For the person at the front desk of a practice, the workflow will have to change.

But that change is already underway, pushed by the COVID-19 outbreak that left practices large and small rethinking their payments processes. Rectangle installed more payment portals in the first six months of the outbreak than they had in the previous three years preceding it, Colabella pointed out. Practices found that in a world where no one could walk through the door and pay them, the only way they would get paid at all was to rethink their processes.

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And in the post-COVID world, he noted, even smaller practices are realizing that never discussing payments with their patients isn’t a good experience, but an unnecessarily stressful one that leads to an expensive collection process on the backend. The fact that there is now a better option is too obvious for most to ignore, Colabella said.

“Don’t be afraid of change,” he advised. “Adopt the best-in-class technology early. It’s not as hard as you’ve been told. Everything seems daunting when you’ve never done it. We’ve done it many, many times in our history. We do it for large practices and small practices. We’ll hold your hand. We’ll get you through it.”