By making self-pay collection calls internally rather than using a collections firm, WellStar has saved more than $1 million annually-and enhanced its relationship with patients.

After outsourcing its self-pay collections for several years, Marietta, Ga.-based WellStar Health System, a five-hospital system with net revenues of more than $1.5 billion, decided in 2010 to bring those collections in-house.

Although WellStar had been satisfied with the performance of its collections firm, it decided to insource collections for financial reasons, says Jeff Korn, executive director of patient financial services. New technology allows health systems to create call centers at a much lower cost than in the past, and in-house collections now cost less than outsourcing.

This has been true at WellStar, as the health system has saved more than $1 million annually since an internal call center was implemented almost two years ago. WellStar also discovered an unanticipated benefit to internal self-pay collections: happier patients.

"Our patients' experience with the revenue cycle department is greatly enhanced," says Korn.

SaaS Call System Cuts Costs

Because of the emergence of Internet-enabled call management systems in the past five years, health systems no longer need to purchase and maintain expensive hardware and IT resources to support call centers. Software-as-a-service (SaaS), or cloud-based call management systems, allow revenue cycle leaders to choose the scope of services desired.

"I really think that a lot of organizations would want to look at running their own call centers now," says Korn. "There are plenty of quality call management systems to choose from."

WellStar uses a SaaS model that provides blended inbound and outbound call management. The cost is low because the service charges a flat rate for each staff member who uses the call system per month, allowing WellStar to use and pay for only the capacity it needs, says Korn.

WellStar previously spent more than $2 million a year on outsourcing collections from uninsured self-pay patients and insured patients who had self-pay responsibility after insurance. Now that those functions are handled internally, the system is spending about $750,000 to employ 18 staff members-comprising the account management department-who handle a much broader scope of responsibilities.

The department is headed by a director who reports to Korn and includes two teams, each of which has a lead. In addition to making collection calls, the account management department handles inbound calls and all other customer service inquiries related to self-pay patients and balances after insurance. Statements, letters, and the timing of phone calls are organized in a matrix that is determined by the patient's propensity-to-pay score.

Phased-In Approach

To allow time for a successful transition, WellStar developed its call center capacity incrementally over a period of approximately 18 months. In February 2010, WellStar employees took over self-pay after insurance.

A year later, in February 2011, it stopped placing pure self-pay accounts from uninsured patients with its outside vendor and started handling new accounts internally. The vendor worked its existing account load until June 2011.

A key to the operation's success, Korn says, is the department director's previous experience of managing a call center. Software and staff management require an expertise that is generally not found among healthcare revenue cycle leaders.

"I can teach the call center manager about health care-and there's plenty of healthcare expertise here to back that staff up-but the call center technology experience and management of people in a call center is what you really need to identify for your management team," says Korn.

Satisfied Patients and Employees

Regardless of how good the collections vendor is, patients who receive calls from an outsourced collection company usually recognize that they are not speaking with someone calling from the local hospital, according to Korn. This eliminates any chance that the collections process enhances the hospital's relationship with the patient, and if the calls are not handled with sensitivity, it risks damaging the provider/patient relationship.

"Employees at the vendor don't have the WellStar culture embedded in their interactions with patients," he says. "We take patient satisfaction very seriously."

Since moving self-pay collections in-house, Korn says there has been an increase in patient satisfaction scores on survey questions that relate to patients' billing experiences. The questions do not specifically address collection calls; however, Korn believes that by using staff members to handle collections, WellStar gets to use its patient-focused culture to full advantage.

Korn also believes insourcing collections underscores WellStar's priority of providing world-class customer service, and employees appreciate knowing that patients are being served by staff members who share their workplace values.

"We're all on the same wavelength, and it really does pay off for our patients and employees if the organization has been successful instituting that kind of positive culture," says Korn.

Jeff Korn is executive director of patient financial services, WellStar Health System, Marietta, Ga., and a member of HFMA's Georgia Chapter (

Publication Date: Friday, November 18, 2011