Automated collection systems improve cash flow
by Edward F. Robinson
As healthcare organizations follow retail collection firms in adding computer based systems to track and recover receivables, they should consider potential benefits and pitfalls while shopping for the right system.
Retail collectors report sizable productivity gains as a result of using automated collection systems. A survey by the American Collectors Association(a) found that collectors using computerized systems handle twice as many accounts as those who manage their workloads with paper files.
The appeal for healthcare organizations follows a similar line. The foremost advantage of an in-house automated system is improved cash flow. Cutting days or even weeks off average collection time can make an important difference in a hospital’s financial health.
Meanwhile, many business office managers must hold the line on adding new staff members at a time when the volume of self-pay accounts and third-party payment delays are at all time highs. Without additional staff members to handle problematic accounts, even less time is available to work on each account, and more accounts must be prematurely sent to outside collection agencies.
Benefits of automation
Computer systems bring greater efficiency, but they will not necessarily allow patient account representatives to handle more accounts per person. This is particularly true if employees already have difficulty completing their workloads. The systems can, however, dramatically improve overall recovery rates.
Typical guidelines for evaluating any computer system also apply. Research on vendors’ backgrounds should be completed.
Hospital teams shopping for automated collection systems should find out how long potential vendors have been in business and whether they are financially viable. They should ask for the number of similar systems each vendor has installed. The team also should determine whether the package has been developed specifically for hospital use or if it needs extensive and expensive modifications for this use.
Hospital representatives should visit vendors’ offices to meet behind-the-scenes people who will work on their systems. Above all, they should ask for user references and visit a user site to see the system in operation.
Because automated collection systems also require an investment in hardware, hospitals should know who is responsible for equipment maintenance, and they should gather information on the repair firm’s track record.
PITFALLS. In purchasing a new system, hospitals should determine how much flexibility is built into the vendor’s software. They should avoid a system that gives few or no options for tailoring the software to specific procedures.
For example, hospital business offices may have different criteria for assigning acocunts for follow up. Some hospitals may send one, two, or three notices before making follow-up calls. Others may send none. By selecting a system that offers a wide range of options, hospitals avoid paying for unnecessary system modifications.