Healthcare reform isn’t just impacting the way doctors and hospitals provide care to their patients—it is also affecting the kinds of services they seek from their banks.
Hospitals operate under a different business model than other businesses. Healthcare providers today need financial partners that understand the complexity of their business model and offer solutions that meet their particular needs. These include products and services designed to help patients pay their medical bills, as well as other solutions that increase a hospital’s cash flow, create new revenue streams and provide a way to finance projects that might otherwise consume available cash.
Making Hospital Bills More Affordable
The last thing a patient needs after a hospital stay is the stress of medical bills piling up. But for many families, that is a reality. There are several reasons why.
For one thing, the cost of healthcare—as well as the cost of insurance deductibles and co-pays—continues to rise. More people are receiving healthcare coverage through the Affordable Care Act, and many are now seeking care they had previously delayed. For these and other reasons, some families find themselves saddled with large bills they are unable to pay outright.
Patients discharged from some hospital systems now have a more affordable alternative. Health services financing programs are making it possible for them to consolidate co-pays, deductibles and other out-of-pocket expenses into a lump sum that they repay over time with a loan through the hospital’s partner bank.
Health service financing solutions can help ease patients’ minds and support their recovery. They also provide a way for hospitals to obtain payment for their patients’ outstanding balances without credit applications, documentation and loan denials.
For some patients, the challenge isn’t finding the money to pay their medical bills. It’s figuring out exactly what amount they are expected to pay—and where and how to make the payment. Many banks have developed solutions to this challenge as well. For example, patients in our partner hospitals can go to the hospital website and, with a few clicks on their computer or phone, pay their bill online.
Supporting Hospital Operations
Other new banking solutions are designed to help healthcare providers themselves operate more efficiently. Hospitals today can take advantage of accounts-payable systems that enable them to pay participating vendors electronically and share in the bank’s revenue in return. These solutions not only turn a hospital accounting department into a revenue center, it can improve internal controls and increase productivity as well.
There are many other cash management tools available to help hospitals manage and speed access to cash, as well as reduce the threat of fraud. It’s a good idea for healthcare providers—like other businesses—to undertake a periodic review of the treasury services they are using to ensure their institution is using the latest and best options, and paying for only the services they really need.
The Right Financing Option
There are times when the smartest way to fund a project is with someone else’s money. Whether a hospital needs to finance a new piece of equipment, fund construction of a new medical office building or secure a new line of credit, there are many funding options, including tax-exempt financing and leasing. Under the right financing structure, capital projects can proceed and show a positive contribution in a timely fashion. So make sure you know your options.
The bottom line: if you work in a health system and your banker hasn’t talked to you lately about how he or she can help with your operational and funding needs, it may be time to start asking questions yourself. Some valuable alternatives may await you. iBi
Steve Daggs is a senior vice president focusing on healthcare banking for Commerce Bank in central Illinois.
