7 Actionable Ways to Improve Patient Collections in Healthcare

Key Takeaways on Improving Patient Collections

• Collecting at point-of-service and providing clear price transparency upfront significantly increases payment likelihood and patient satisfaction.

• Digital payment options and flexible payment plans remove barriers to payment, with most patients preferring online payment methods.

• Two-way text messaging for payment reminders has proven highly effective, with one facility reducing accounts receivable by $62,000 in just six weeks.

• Properly trained staff and strategic follow-up processes form the foundation of successful patient collection strategies.

Point-of-Service and Pre-Service Financial Management

The moment a patient walks through your door represents your best opportunity to collect payment.

Research consistently shows that collecting at the point of service is significantly more effective than trying to secure payment after the patient leaves.

This approach works especially well when the providers themselves are involved in the registration process.

To make this work, your registration staff needs proper training to understand and effectively communicate patients' financial responsibilities.

When staff can confidently explain costs based on the services being rendered, patients are more likely to pay at the time of service.

Providing cost estimates before appointments has become increasingly important.

Many patients consider out-of-pocket costs a decisive factor when choosing healthcare providers - about 77% rate these costs as extremely or very important in their decision-making process.

Clear pre-service estimates allow patients to plan financially and reduce surprise billing confusion.

Remember that the No Surprises Act of 2022 makes upfront estimates more than just good practice - they're legally required.

Failing to provide proper estimates can result in penalties as high as $10,000 per violation.

Setting standardized billing procedures across your organization helps minimize confusion and prevents costly errors that could delay payment.

When communicating with patients, make it clear that full or partial payment is expected at the time of service.

Setting these expectations early leads to better collection rates and fewer misunderstandings later in the process.

Two-Way Text Messaging for Revenue Cycle Management

Text messaging has emerged as a game-changer for healthcare collections.

Two-way texting platforms like Dialog Health enable payment reminder texts with convenient payment portal links, dramatically reducing accounts receivable balances while decreasing the need for staff phone calls.

The results speak for themselves.

One ambulatory surgery center (ASC) reduced their outstanding accounts receivable from $110,000 to $48,000 in just six weeks using Dialog Health's texting platform.

Another physician group practice reduced appointment no-shows by 34% with automated text reminders, projecting an additional $100,000 in revenue.

Text messaging reaches patients where they are - on their mobile devices.

With average reach rates of 96%, text messages significantly outperform traditional communication methods like phone calls and mailed statements.

HIPAA-compliant texting solutions can send automated payment reminders with customizable triggers and conditions that match your workflow.

This approach doesn't just improve collections - it frees your staff from time-consuming phone calls and the expense of generating and mailing reminder invoices.

Staff can redirect this time to higher-value activities that further improve patient care and practice efficiency.

Clear Communication and Pricing Transparency

Well-designed billing statements make a world of difference in collection success.

Your statements should clearly show the balance due while providing detailed information about services, charges, payments, and any adjustments made.

Include easy-to-find contact information for billing questions to reduce patient frustration.

Many healthcare organizations don't realize that patients often struggle to understand what they're being asked to pay.

Statements lacking sufficient detail leave patients confused and less likely to pay promptly.

This confusion leads to payment delays and increased collection costs.

Price transparency isn't just good practice - it builds trust with your patients.

When patients understand their costs upfront, they feel empowered to manage their healthcare expenses and experience fewer billing conflicts.

In fact, about 60% of patients would consider switching providers after receiving a surprise bill or inaccurate estimate, making transparency essential for patient retention.

To improve transparency, publish a clear price list for common procedures, train your staff to educate patients about potential costs, and ensure all billing statements are easy to understand.

The federal No Surprises Act of 2021 formalized these requirements, but many healthcare organizations still have work to do in providing true price transparency.

Digital Payment Solutions and Patient Portals

The digital transformation of healthcare payments represents a major opportunity for improving collections.

Today's patients increasingly prefer electronic payment options, with nearly 70% favoring streamlined, online payment systems for their medical bills.

A well-designed patient portal serves as more than just an information hub - it becomes a powerful collection tool.

Your portal should provide detailed billing information while maintaining high security standards for HIPAA compliance.

A self-service payment management system allows patients to view and pay past bills without requiring staff intervention, improving efficiency for everyone.

Recent healthcare payment studies show that 85% of patients want to make payments online, while 79% worldwide already use contactless payment methods.

Meeting these preferences isn't just about patient satisfaction - it directly impacts your bottom line.

Digital payment systems allow your practice to generate, track, and process billing through one integrated system.

This integration reduces errors and ensures information transfers correctly.

Sending invoices through text messages or patient portals significantly increases engagement and payment rates compared to traditional mail-based statements.

Flexible Payment Options and Financial Policies

Offering flexible payment options can transform seemingly uncollectible balances into reliable revenue streams.

When patients face large medical bills, the prospect of making a single large payment often leads to avoidance or non-payment.

Time-based payment plans or discounted payment options motivate patients to resolve medical debt that might otherwise go unpaid.

A PYMNTS report found that 63% of patients want access to payment plans, and 33% would actually switch healthcare providers just to establish one.

With studies showing about 40% of Americans struggle with bills and credit payments, these flexible options aren't just nice to have - they're essential for maximizing collections.

Consider implementing various payment solutions: installment plans, convenient credit card processing, patient financing options through third parties, and discounts for paying in full upfront.

Some organizations have found success with shorter billing cycles, moving from monthly to twice-monthly schedules to align with patients' paycheck timing.

Automatic bill-pay options that let patients choose their payment dates accommodate individual budgets and reduce financial stress.

When patients feel they have manageable options, they're much more likely to fulfill their financial responsibilities.

Strategic Follow-up Programs and Workflow Automation

After the initial billing, strategic follow-up makes the difference between collecting payment and writing off debt.

Effective follow-up programs prioritize outreach based on algorithms that score patients' propensity to pay, allowing you to focus resources where they'll have the greatest impact.

Create a statement cycle that begins immediately when patient responsibility is established.

Many successful practices work toward tightening collections to 90 days or less.

Each statement should specify clear due dates, and your organization should consistently follow through with the actions announced in your notices.

Revenue cycle management (RCM) data analytics provide powerful insights that improve collection rates.

These tools can predict which patients are likely to pay, identify those who might qualify for financial assistance, and determine the most effective communication methods for different patient segments.

While standard practice typically involves monthly follow-ups through phone calls and emails, some organizations have found success with streamlined approaches.

Shortening billing cycles by eliminating one statement - sending only two statements followed by a single collections alert - can accelerate payment while reducing administrative costs.

Staff Training and Collection Performance Metrics

Your front office staff sets the tone for the entire patient financial experience.

Effective training ensures they can help patients understand financial responsibilities beyond simply reading from basic scripts.

Staff should clearly explain concepts like deductibles, copayments, coinsurance, and out-of-pocket maximums in ways patients can easily understand.

Patient-facing representatives need skills to help patients genuinely understand their financial responsibilities.

This understanding increases the likelihood of prompt payment and reduces confusion-related payment delays.

When evaluating staff performance, focus on quality metrics rather than simply speed or call volume.

Measure factors like First Call Resolution, Right Party Contact rate, and collection success rates by communication method.

Track organizational metrics including average days in accounts receivable, gross collection rate, and point-of-service collection rate.

Provide ongoing training on payer policies, which change frequently and can confuse both staff and patients.

Effective communication about payment should occur at multiple touchpoints - check-in, during service, and at discharge - to reinforce payment expectations and increase collection rates.

Remember that the bottom line matters most.

If a representative spends longer than average on patient calls but achieves higher collection rates, that's ultimately more valuable than strict adherence to time metrics. Focus training and incentives on outcomes rather than process alone.

With these seven strategies implemented thoughtfully and consistently, your healthcare organization can significantly improve patient collections while maintaining positive patient relationships.

The key lies in making the payment process clear, convenient, and compassionate - recognizing that financial interactions form an important part of the overall patient experience.

Transform Your Patient Collections with Dialog Health's Two-Way Texting

Struggling with patient collections? You're not alone.

Dialog Health's HIPAA-compliant two-way texting platform directly addresses the challenges outlined in this article, helping healthcare organizations collect more patient payments with less staff effort.

Our clients have seen remarkable results, including 54% reduction in accounts receivable in just six weeks and 34% fewer no-shows.

Dialog Health's platform seamlessly integrates with your existing systems to:

• Send automated payment reminders with direct links to your payment portal

• Provide pre-service financial estimates and instructions

• Communicate payment options and payment plans via text

• Reach 96% of patients compared to traditional methods

• Free your staff from time-consuming phone calls and paper statements

Ready to see how Dialog Health can transform your patient collections? We'd love to show you how our solution works in just 15 minutes!

Bo Spessard, COO

Written by Bo Spessard Spessard                                                   Bo brings the perspective of both an entrepreneur-operator and trusted advisor to Dialog Health. He spent 5 years as a corporate attorney and 15 years leading fast-growing B2B SaaS companies. His expertise expands enteprise software, scaling sales organizations and empowering staff to deliver exceptional client services. He was COO of Emma, a B2B SaaS marketing company which was acquired by Insight Partners in 2018. Since Emma, he has advised multiple companies through transition, growth and fundraising. At Dialog Health, he is leading Sales & Marketing and doing his level best to bring corduroy back from the 1970s.