TransUnion Healthcare Survey Paints Troubling Picture of Medical Bad Debt

An astounding 97 percent of hospital administrators from 22 hospitals in 15 states said they are seeing a rise in the uninsured and underinsured populations, resulting in increased bad debt and the further straining of charity programs. The findings were gathered from a survey administered by TransUnion in conjunction with its Healthcare Users Group Conference. Nearly half of the survey respondents experienced a 6-10 percent increase in the uninsured and underinsured population since the beginning of 2007 with another 28 percent observing an 11-20 percent increase.

"The results of the TransUnion healthcare survey underscore the magnitude of the uninsured and underinsured populations on the healthcare industry, and based on discussions at our Healthcare Users Group Conference, it is apparent that hospitals are working to ensure they can balance the fine line between providing quality care while also being fiscally responsible," said Rod Bazzani, executive vice president of healthcare for TransUnion. "We are finding that more and more hospitals are looking to healthcare revenue cycle workflow and financial analytics products such as TransUnion’s Revenue Manager(SM) to both decrease bad debt and match more uninsured patients with financial assistance."

When ranking business issues in order of concern, treating and managing the uninsured and underinsured, collection processes at both the front- and back-end of the revenue cycle and dealing with higher co-pays and deductibles were the top three among hospitals surveyed, garnering 69 percent, 18 percent and 14 percent of responses, respectively.

These concerns dovetail with the survey findings where more than 40 percent of respondents indicated they have bad debt percentages between 7 and 10 percent.

"This was particularly unsettling to learn because national healthcare organizations have generally operated with much lower bad debt numbers, but now we see that a majority of hospitals are experiencing exceedingly high bad debt percentages," added Bazzani. "In fact, at a recent industry function, a hospital executive gave this sobering prognosis, ‘No margin, no mission.’"

In terms of impact on their hospitals, approximately 83 percent of survey respondents said increasing bad debt had the largest bearing on their hospitals because of the uninsured and underinsured patient population. Of the respondents, 62 percent said their charity program would be negatively affected by this increasing group.

Dan Angel, the director of patient financial services at Via Christi Regional Medical Center in Wichita, Kan., attended the Healthcare Users Group Conference and concurred with the survey findings as they related to the uninsured population.

"Ten percent of our patient population is uninsured, which represents $12 million per month in gross revenue," said Angel. "As one can imagine, this has had a significant impact on the way our hospital operates, and solutions such as TransUnion’s Revenue Manager help us defray some of those costs and continue our mission by assisting our uninsured population in attaining benefits."

TransUnion introduced the functionally enhanced Revenue Manager platform and healthcare analytic tools during the Healthcare Users Group Conference, which took place in September, 2008 at the Ritz-Carlton in New Orleans. Attendees from across the country exchanged fresh insights on increasing collections, managing bad debt and improving operational efficiencies. Some of the key discussions included: segmentation analytics; upfront patient identity validation and time of service collections; work flow strategies and consumer-directed health plans increasing patient responsibility and patient attitude shifts.

Other key survey findings include:

• Nearly 68 percent of survey respondents are concerned with how their state or local political landscape is changing, particularly as it relates to charity reporting or community benefit.
• Approximately 9 percent of all patients from the hospitals surveyed are self-pay patients.
• Nearly 79 percent of respondents said they are concerned that Consumer Directed Healthcare Plans (CDHPs) will increase their bad debt within the next two years.
• When ranking business objectives in order of importance, 43 percent of respondents said increasing collections at the time of service and post discharges were their No. 1 objective, followed by improving operational efficiencies at 21 percent and decreasing bad debt at 18 percent.

"From a business perspective, this survey further validates TransUnion’s approach in working with hospitals to deploy financial tools and software to automate processes that five to 10 years ago were limited to adoption and use in financial-related industries," continued Bazzani.

About TransUnion
As a global leader in credit and information management, TransUnion creates advantages for millions of people around the world by gathering, analyzing and delivering information. For businesses, TransUnion helps improve efficiency, manage risk, reduce costs and increase revenue by delivering comprehensive data and advanced analytics and decisioning. For consumers, TransUnion provides the tools, resources and education to help manage their credit health and achieve their financial goals. Through these and other efforts, TransUnion is working to build stronger economies worldwide. Founded in 1968 and headquartered in Chicago, TransUnion employs more than 3,600 employees in more than 25 countries on five continents. http://www.transunion.com/healthcare