Hospitals? New Year?s Resolution 2009: More Aggressive Debt Collection Practices?

A recent article in The Salt Lake Tribune suggests that Utah hospitals have begun to chase the money owed to them by patients more vehemently than in the past, even as the average unpaid balance is just $380 according to one healthcare collection agency in the Beehive State.

The November 28, 2008, article notes that “Utah’s four largest hospital systems — Intermountain Healthcare, University of Utah, MountainStar and Iasis Healthcare — were owed $259 million in their 2007 fiscal years, a 77 percent jump from five years ago.”

It should come as no surprise to readers concerned about healthcare finance—directors and c-level business office personnel healthcare providers, healthcare collection mangers and executives, and medical debt buyers—that hospital and physician group bad debt is and has been on the rise.  Nor it is any great revelation that placement volumes of medical paper to collection agencies have increased in 2008.

But hospitals have historically taken a kid gloves approach to internal and outsourced collection practices.  Apparently, “auld acquaintance” should be forgot… and only brought to mind via a collection letter, or a property lien, or a knock on the door from the county sheriff.

According to The Salt Lake Tribune, “From July 2007 to June 2008, the nonprofit University of Utah seized $4 million in income tax returns from patients who had not paid medical bills. It also received judgments worth $500,000 on 69 of that period’s 1.15 million accounts. Many more lawsuits were filed against patients whose debt occurred years before.  Nonprofit Intermountain Healthcare does not take people to court. Instead, it reports patients who refuse to pay to credit agencies.”

In 1788, Robert Byrnes penned the now-ubiquitous lines to “that New Year’s Eve” song.  The second verse to in the Scotsman’s tongue goes:

And surely ye’ll be your pint-stowp!
And surely I’ll be mine!
And we’ll tak a cup o’ kindness yet,
For auld lang syne.

For those readers who are Tartan-deficient, allow me to translate.  The lyrics are traditionally understood to emphasize the last two lines: that it would be well and good to share a pint (medicine), all charitable-like, and reminisce about old times.  

Read in the context of healthcare in 2009, the first two lines should be heard loud and clear as they echo from the halls of hospital business offices: You buy yours, and I’ll buy mine!  Happy New Year: now pay me.