Holly Fletcher of The Tennessean has written a very informative feature on the hospital revenue cycle, including a seven-deck slideshow that translates the process into layman’s terms. (The Tennessean is the best daily newspaper for understanding hospitals, because Nashville is home to over for-profit hospital chains which control 60 percent of the beds in that industry, so the journalists know what they are talking about.)
Ms. Fletcher describes an insane system of billing which has been focused on getting dollars out of the byzantine bureaucracies we call health insurers. The main economic reason insurance should be for rare, unforeseen, catastrophic events is that claims processing is expensive. It is not just shuffling paper around, but also managing fraud, waste and abuse. This adds to what is called the “load” of insurance.
When it comes to getting money from patients directly, hospitals are hopeless, with two thirds of their accounts receivable remaining unpaid: “Billing practices are not designed to collect small, incremental payments from hundreds or thousands of patients. They are designed to bill a handful of large entities — insurance companies — not individuals who walk in the door.”
One might think this was a problem that is not too difficult to solve: Just call the supermarket or department store and ask them to recommend a point-of-sale technology vendor.
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