Small percentage of uninsured patients generate most of hospitals’ self-pay revenue

Dec. 14, 2018

A TransUnion Healthcare analysis found that 30% of self-pay accounts—those patients without health insurance or those that have a patient balance after insurance—will generate more than 80% of the self-pay revenue collected by hospitals. TransUnion released this information as part of a campaign to highlight the importance of healthcare insurance discovery.

The findings are significant because the number of patients without health insurance increased to more than 12% at the end of 2017. Furthermore, Patient Balances after Insurance (PBAI) have been steadily rising—increasing from 8% of the total bill responsibility in Q1 2012 to 12.2% in Q1 2017.

Following years of decline since the Affordable Care Act was passed in 2010, the uninsured rate grew from 10.9% in Q4 2016 to 12.2% in Q4 2017. As a result, hospitals are taking a much closer look at cost control measures; however, they still may be missing the most important part of the picture: An optimized revenue cycle which ensures earned revenue becomes paid revenue.

This presents a clear opportunity for hospitals to obtain revenue from accounts that are most likely to be paid in full. More opportunities may exist on such accounts as between one and five percent of self-pay accounts that are written off as bad debt actually have billable insurance coverage.

While some hospitals are improving their profitability via cost cutting, new research also shows that optimizing revenue cycle procedures may be of even greater benefit. In 2018, cutting costs was the highest priority for 63% of hospital C-suite executives, according to a Premier survey. Yet, a recent Advisory Board study indicated that the typical 350-bed hospital may be leaving $22 million on the table by focusing on cutting costs over optimizing their revenue cycle.

TransUnion has the full release