Health system leaders aimed to accelerate cash flow by selecting a program that would immediately fund patient accounts and reduce the health system’s bad debt.


Revenue cycle leaders at Trinity Health, a Livonia, Mich.-based Catholic health system operating more than 80 hospitals in 21 states, wanted to give patients an affordable way to pay their medical bills over an extended period of time. “We needed a program that would provide more options on the front end to patients who were not able to pay under normal collection policies and procedures,” says Stephen Early, director, central operations. At the same time, leaders recognized they needed to move away from their existing loan programs, which charged patients interest rates ranging from 18 to 25 percent. “Patients were not interested in taking out loans at these very high interest rates, so utilization was low,” Early says.

Trinity Health leaders also aimed to accelerate cash flow by selecting a program that would immediately fund patient accounts and help the health system reduce its bad debt, Early says. “We wanted a program that would allow the accounts to be paid off at the time the loan was approved to relieve our A/R [accounts receivables] and allow the patient to pay the lender without our regional hospitals having to carry the responsibility for these patients. We also wanted to relieve the burden from our hospitals of setting up long-term payment arrangements with patients. In many cases, these accounts would never be paid off or the hospitals would have to carry the receivable as well as expend the cost to collect over long periods of time.”

Evaluating Your Cost to Collect
Evaluating Your Cost to Collect

Trinity Health’s solution was to offer loans at 4 percent interest to patients unable to pay within three months, which it later extended to 12 months. The health system also integrated the patient financing program into its revenue cycle workflows across the organization.

Two years after implementation, Trinity Health has booked nearly $86 million on its balance sheet from low-interest patient loans and cut a day from its A/R.

Building a Better Patient Financing Program

Leaders at Trinity Health took the following actions to roll out their new patient financing program.

Compiled a wish list. Trinity Health wanted its patient financing program to fully fund patient accounts once the loans were approved so the accounts could be removed from receivables, Early says. They also wanted to offer patients lower interest rates than were typically available through banks and credit card companies.

In addition, leaders wanted the vendor to provide meaningful reports on loan activity. “It was important that the vendor work with us on reconciliation to make sure we were in sync on the current status of patient accounts,” Early says.

After compiling a list of these and other capabilities, revenue cycle leaders worked with Trinity Health’s sourcing department to initiate the request for proposal (RFP) process.

Selected a vendor. The sourcing department invited eight potential suppliers to return requests for information (RFIs). Leaders created a rating matrix to evaluate the RFIs and then sent formal RFPs to four vendors. To select the vendor, leaders formed a team that included representation from Trinity Health’s corporate sourcing and patient financial services departments, as well as the regional hospitals. Before finalizing their decision, team members reviewed the cost to collect under each proposal. They also studied two years of vendors’ financial statements to ensure the stability of their potential partner.

In addition, the team invited IT leaders to join the vetting process. “We needed to understand each vendor’s ability to interface and automate different workflows within the various platforms that we had in our hospitals so we didn’t place additional burden on staff,” Early said.

Understood the rules of different states. Because Trinity Health covers 21 states, revenue cycle leaders worked closely with the health system’s legal team to make sure their patient loan program followed various federal and state regulations, Early says.

Trained the staff on new scripts. With help from their vendor, leaders at Trinity Health standardized scripts for staff on the front end and back end to discuss the advantages of the new loan program. “For example, the staff might mention that the program was a way for patients to restart their credit and begin an acceptable record of payments if they had run into some problems in the past,” Early says.

Developed marketing materials. Revenue cycle leaders at Trinity Health reached out to marketing leaders in each region to help develop easy-to-understand brochures and other materials on the program.

Tested the program first in a few regions. In just seven weeks, leaders at Trinity Health rolled out the patient financing program to 16 facilities in four regions, focusing first on collections and other back-end processes, rather than front-end processes like patient registration. They worked with the vendor to host kick off meetings in each region, followed by on-site training. Vendor representatives were available at each hospital for three days following the go-live date to handle any issues. Gradually, leaders at Trinity Health rolled out the program to the other regions.

Web Extra: Trinity Health Weekly Loan Funding Program Report

During the first year, the patient financing program relied on manual processes that required staff to do the legwork. For example, staff focused only on post-bill accounts and manually included a flyer in each patient’s first statement. A year later, leaders automated processes like these to streamline the workflow and create more standardization across the organization.

Stayed flexible. In addition to eliminating high interest rates, the new program did not offer extended payment arrangements. Before implementing the new program, Trinity Health offered up to 24 months of financing at zero interest. When revenue cycle leaders launched the new program in 2013, they initially offered a 90-day payment arrangement at zero interest. In April 2015, leaders replaced that with a 12-month, zero-interest-rate loan program. “We felt we were losing an opportunity to expand the loan program by not offering an option to patients who cannot pay in 90 days but can pay within 12 months,” Early says. “So far, it’s been extremely popular with patients as well as staff.”

If a patient is unable to pay a bill in 12 months, Trinity Health’s patient financial services staff will refer the patient to the vendor to discuss an extended payment plan at 4 percent interest. The program includes recourse loans with options to pay in up to 60 months.

Cultivated patient loyalty. The program includes a loyalty card that allows patients to add charges to their initial loan if they need additional services.

Learning from the Implementation

A year after rolling out the program to its hospitals, leaders at Trinity Health automated the loan program into the system’s revenue cycle software and standardized workflows across the heath system. Looking back, Early says the process would have gone more smoothly if leaders had automated the program as part of their initial rollout.

“At the start, the program required significant manual input from the staff,” Early says. “When we were ready to automate, there was some push back from the regions because each operation had already developed its own unique workflows and processes. Ideally, you don’t want to circle back to all of the facilities to implement the automation.”

Today, the patient financing program is also offered to patients in Trinity Health’s physician offices, not just its hospitals. In addition, leaders are rolling out the program to the hospitals of Catholic Health East, which merged with Trinity Health in 2013.

So far, leaders at Trinity Health have not specifically measured patients’ satisfaction with the new loan program, although Early believes the changes have enhanced the patient experience. “The program has given new options to patients who might not have been able to pay before,” he says. “At the same time, the hospitals are happy to offer another tool to patients.”


Laura Ramos Hegwer is a freelance writer and editor based in Lake Bluff, Ill., and a member of HFMA’s First Illinois Chapter.

This article is based in part on an ANI presentation in Orlando in June 2015.

Interviewed for this article: 
Stephen Early is director, central operations, Trinity Health, Livonia, Mich., and a member of HFMA’s Eastern Michigan Chapter.

Publication Date: Monday, February 01, 2016

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