The health system increased cash flow by $2.7 million in the first year.


Nearly a decade ago, leaders at Metro Health, which includes a 208-bed osteopathic teaching hospital in Wyoming, Mich., and 20 physician offices across Grand Rapids, wanted to differentiate the health system in a competitive market. At the same time, they needed to improve cash flow to fund an expansion and invest in more services to meet community needs. Their solution was to implement flexible patient payment options, which have accelerated cash flow and stabilized bad debt.

Helping a Community in Need

In 2007, Metro Health Hospital moved 12 miles from downtown Grand Rapids to a 170-acre suburban site with room for expansion, making it the only suburban hospital in Grand Rapids. A year later, the 2008 economic crisis hit the country, and resources were scarce.

“As an independent hospital, we spent every resource we had to build this facility,” says Kris Kurtz, CFO. Bad debt and self-pay were increasing, yet leaders needed cash to continue to make strategic investments.

At the same time, leaders recognized they had a responsibility to help western Michigan residents who were hit hard in the economic downturn. Many had lost jobs and health coverage but still wanted to pay their bills. One trustee challenged the executive team to figure out a way to help the community without bankrupting the organization at the same time, Kurtz says.

Leaders decided to offer flexible payment options under a program called Metro Care, which includes the following components:

  • A 25-month, zero-percent interest payment plan available to all patients
  • A community benefit discount on most services, including inpatient care, office visits, lab tests, physical therapy, and imaging for uninsured patients
  • Traditional charity care with payments based on a sliding scale

Some patients may be enrolled in all three components simultaneously.

Rolling Out the Program

After conducting due diligence on several patient financial solutions, leaders at Metro Health chose to offer a 25-month, zero-percent interest payment plan to help patients pay their bills.

With the help of a vendor partner, the program was implemented across the health system, so patients can use their payment plan loyalty cards in the hospital, physician offices, and for tests. Since 2013, more than 300,000 patients have been enrolled at any given time. Currently, there are 27,000 patients with active balances.

Metro Health Flexible Payment Program Results
Approximately 30,000 MetroHealth patients have taken advantage of its payment plan program.

Just after implementation, Metro Health experienced a big bump in cash flow—$2.7 million in the first year—that has since leveled off. The program also has helped keep days in accounts receivable (A/R) in check by sending those accounts to its vendor partner quickly. Today, Metro Health submits its balances that are still unpaid after the third statement to this vendor so patients can be enrolled in the program.

“We’ve gone the route of almost entirely outsourcing the self-pay function,” he says. “We needed to manage [self pay] as a portfolio.” By carving out this function, the revenue cycle team reallocated four staff members to work on commercial and Medicare denials and other problem areas.

Thanks to the flexible payment options, Metro Health also has flattened its bad debt over the past nine years, which was one of its key goals. “Our rate of bad debt has been fairly consistent every year since we’ve implemented, even while the economy struggled over those years,” he says.

Kurtz says the most challenging aspect was rolling out this program at the same time leaders were implementing a new electronic health record (EHR). This meant implementing the solution in the old financial system and the new financial system just six months apart.

Heeding Lessons Learned

Kurtz provides the following suggestions for organizations looking to meet their communities’ needs while ensuring better cash flow and tackling bad debt.

Involve marketing early. Metro Health’s marketing team designed a media blitz to promote the Metro Care program. As part of the campaign, Metro Health’s CEO appeared on multiple radio and TV programs. “Being on the nightly news during the health segments did a lot for us,” Kurtz says.

The marketing team also created website ads and sent physician liaisons to practices to share the news. Leaders at Metro Health worked with vendor partners to create collateral materials, including patient brochures. “It was a true marketing launch,” he says. The goal was to convey “that Metro Health wanted to be their partner in all of their health care.”

Assess the market. Metro Health has 10-12 percent of its local market, which includes two other health systems. After implementing Metro Care, Metro Health gained 300 patients from another hospital that discontinued its zero-interest plan.

Offer proper training. The vendor partner helped educate Metro Health’s frontline staff in registration and customer service and offered guidance on having financial counseling discussions. They hosted weeklong train-the-trainer sessions, and a lead trainer was located at each off-site registration and customer service location.

The goal was to make sure that staff could reiterate the key points about the program by memory without having to look at cheat sheets, Kurtz says.

Stay in sync. Make sure hospital and vendor systems are in sync to ensure accuracy. “It is extremely important to not let this fall behind,” Kurtz says. “I have staff that look at the reconciliation reports and work any errors that may occur on a daily basis.”

Tie financial health to other wellness activities. To demonstrate the health system’s focus on wellness, Metro Health offers free or low-cost seminars and health screenings under the Metro Care program umbrella. Recent events have included heart-healthy grocery store tours and yoga classes.

Changing the Conversation

When Michigan expanded Medicaid in 2014, Metro Health saw a significant drop in its uninsured population. However, the rise of high-deductible health plans makes flexible payment options attractive for patients who cover portions of their bills.

In late 2016, Metro Health affiliated with the University of Michigan, giving patients access to specialists without losing its community-oriented focus. Today, Kurtz and Metro Health’s 200-FTE revenue cycle team are focusing on third-party denials, documentation accuracy, and audits. They also plan to implement contract modeling software to identify underpayments.

Through these changes, Kurtz is grateful that the Metro Care program has helped to change the conversations that revenue cycle staff have with patients. The zero-percent payment plan option has been particularly well received, appealing to proud western Michigan residents who want to pay their bills but need a little more time, Kurtz adds. Patients with high-deductible health plans who might throw up their hands when they receive a bill for their $2,500 patient responsibility appreciate the ability to pay $100 off over 25 months with no interest. “We’ve gotten several patient letters over the years thanking us for even having [a zero-percent interest payment plan] as an option,” he says. “It becomes a whole different conversation for them. It certainly helps give them multiple options.”


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

Interviewed for this article:

Kris Kurtz is CFO, Metro Health Hospital, Wyoming, Mich., and a member of HFMA’s Western Michigan Chapter.

Publication Date: Thursday, May 03, 2018