Cameron Memorial Community Hospital: Bad Debt Dropped by 25% in Just One Year
Another organization that got a fast return on its patient financing investment is Cameron Memorial Community Hospital, a critical access provider in the northeast corner of Indiana. As with the examples outlined above, Cameron Memorial needed a partner to take over existing payment plans.
“We had an extended payment plan that we managed internally,” said Jennifer Weisenauer, director of patient accounting. “We had an outside organization help with that, but the reconciliation was quite cumbersome. And since our plan was more generous than others, weren’t getting timely payments.”
HELP came in and took over $1.4 million of Cameron Memorial’s existing plans, which hap- pened to be very timely since the organization had recently undergone a system conversion.
“We had an initial influx of cash at a time when things were pretty tight, because our A/R days were still high due to our conversion to Epic,” said chief financial officer Doug Bomba.
HELP proceeded to implement its program that includes the first 12 months interest-free. HELP also provided the template for brochures that are available to patients when they talk to financial counselors. Beyond the payment plans themselves, the resources that HELP has pave the way for a great patient experience.
“The patient response has been very, very positive,” said controller Wendy Stamper. “We are offering a generous, 12-month interest-free plan. The point is to not send someone to collections, it’s to work with them and resolve their balance.”
In the first year of this partnership, HELP has funded $3.2 million in payment plans, equiva- lent to 2.85% of net patient revenue, with a 1.1% recourse rate. However, the most impres- sive measure of success is the reduction in bad debt. In July 2018, Cameron Memorial’s bad debt was 4.5% of gross charges. In May 2019, that had dropped to 3.4%. That rep- resents a nearly 25% reduction in bad debt, or almost $1.5 million for the hospital.
Cameron Memorial has achieved other notable results from July 2018 to June 2019: gross A/R days have dropped by 15%; net A/R days have dropped by 21%; the percentage of self-pay over 90 days has dropped by 30%; and days cash on hand has increased by 13%.
On top of those performance metrics, the fact patients were satisfied with their financing options further underscores the value of the partnership.
“Patients responded really well,” Bomba said. “They much prefer this option, and as they have more accounts, they can add those to the plans. They view that as a positive as well.”