As tough economic conditions continue to affect Americans, more consumers and employers are choosing health plans with higher deductibles and higher co-pays to avoid paying higher premiums. Under the Affordable Care Act (ACA), out-of-pocket maximums are established for plans sold on the marketplace for the upcoming 2023 plan year is $9,100 for an individual and $18,200 for a family. For many families, these expenses are difficult to budget for, and anything but affordable. In fact, across the country, the patient has become the number three payor, right behind Medicare and Medicaid.
The Cost of Collection
While medical debt is rising across the nation, the cost that healthcare providers incur to collect the debt has quadrupled. That’s right – it costs 4 times more to collect patient debt than it did a few years ago. As providers also struggle with declining reimbursement, readmission penalties, value-based care, and other challenges, finding savings and efficiency in every part of the revenue cycle matters more than ever.
Why Offshore Makes Sense
Outsourcing has been happening for at least the last three decades, as technology makes the world smaller and communication faster than ever before. Sending work to countries with lower wage ranges has less stigma than ever, especially as the labor market in the U.S. is experiencing labor shortages in nearly every sector. Let’s look at some key facts about the world of outsourcing in general:
- Almost 54% of all companies use third-party support teams.
- Globally, businesses spent $75.2 billion on outsourcing last year.
- 78% of all businesses all over the world feel positive about their outsourcing partners.
- 71% of financial service executives outsource or offshore some of their services.
Among all of the types of business that are sent offshore in the U.S., accounting functions are among the most outsourced by small and medium enterprises. It is important to realize that when businesses offshore their accounts receivable (or other revenue cycle functions), they not only save hiring those services in-house, but they also save management oversight.
For example, having an offshore A/R staff from the Philippines can save healthcare organizations 60% to 80% compared to local in-house or U.S. contracted services. The cost differential is phenomenal, allowing organizations to spend more time focusing on lower-balance debt and even older debt.
Even More Benefits
Workload volume in healthcare can vary dramatically due to factors beyond its control. Pandemics, seasonal changes, the addition of services, closing of services – all of these create a ripple effect in all departments, leading to overwork and burnout or not enough work and wasted resources. By offshoring certain functions like A/R, healthcare organizations can flex the workforce as needed to match demand.
Saving HR and recruitment costs. Recruiting and hiring suitable employees takes longer than ever as the country experiences a labor shortage. Most areas have a low unemployment rate, with high competition for entry-level workers such as phone collections.
Saving overhead costs. Workspaces, computers, office supplies, software, utilities – the list goes on. These costs add up, especially when space is at a premium. The offshore employer already incurs these costs, which are calculated into the fees you are already paying for lower-cost offshore workers.
Healthcare organizations obviously value their relationships with patients and the community. They often worry that offshoring could harm that relationship – but it doesn’t have to be that way. When it comes to protecting the quality of services, especially for core processes like collections, it is important to set in place some specific processes.
- Set specific criteria that must be in place when procuring a business partner.
- Evaluate the offshore business’ quality assurance plan and metrics
- Set your own internal quality measures and maintain them to ensure accountability.
- Carefully review the service level agreement and other legal contracts from the offshore company.
- Check references with other U.S. companies to evaluate their satisfaction with the offshore company.
For more information about streamlining A/R processes, saving costs, and increasing patient collections, contact us here.