In this Business Profile, Bruce Haupt, president and CEO of ClearBalance, discusses how a patient loan program can increase patient collections, reduce bad debt, and speed cash flow.

Bruce HauptTell me a little bit about your organization.

ClearBalance® is a San Diego-based company that works with hospitals and health systems to provide consumer-friendly, revolving lines of credit to patients who need or desire assistance paying their healthcare bills. Essentially, we make it easier and more attractive for patients to meet their financial responsibilities. There is no application or credit requirement, and all patients can qualify. Our most popular program offers flexible monthly payments that can span up to 72 months, with no interest or late fees, so individuals are able to make payments that fit within their budgets. Because our program provides the patient with a revolving line of credit, he or she can also consolidate balances for family members and add future services.

Hospitals and health systems use the ClearBalance program instead of managing patient payment plans in-house. We help organizations realize a higher overall net collection rate on their patient payment plans, which lowers bad debt and accelerates cash.

What are some of the biggest challenges you see affecting healthcare organizations?

Maintaining revenue is probably the largest challenge for healthcare organizations today, and a key stumbling block is the shift in the payer mix. On the plus side, with the Affordable Care Act (ACA), there is more coverage for the uninsured, particularly in Medicaid expansion states. This enables providers to receive some level of reimbursement for people who previously did not have insurance. However, Medicare and Medicaid are reducing reimbursement rates. In the past, healthcare providers have relied on the higher reimbursement rates of private insurers to cover the low- to below-cost reimbursement rates of Medicare and Medicaid. The problem with this approach today is that private insurers and employers are increasingly turning to high-deductible health plans (HDHPs), which place more of the payment burden on patients. This is especially true for the newly insured on the exchanges. Unfortunately, patients often have difficulty meeting their responsibilities with these high-deductible plans, resulting in more bad debt and less overall revenue for healthcare organizations.

The rise in consumerism is another challenge that organizations face. As patients sign up for HDHPs, they have more skin in the game and are starting to shop around for healthcare services. Many of our clients are doing a better job of fostering a more retail-like experience, aiming to create a consumerism play within their marketplace. One way of doing this is to offer comprehensive loan programs that let patients pay their bills over time and without penalty.

Another facet of consumerism is regulatory scrutiny—from a privacy and security standpoint with HIPAA, as well as from a financial perspective with organizations such as the Consumer Financial Protection Bureau.

How does your product or service offering(s) help address these needs?

Although hospitals and health systems may see the value in loan programs, they may not have the resources or capabilities to consistently support a comprehensive offering. Their core business is providing health care, not patient payment financing. That’s where we come in. ClearBalance provides flexible programs that comply with financial, consumer, and healthcare regulations, and we dedicate 100 percent of our attention to managing these programs. Patients respond positively to our convenient options. Our program is offered on behalf of a bank. People tend to be more responsive to making payments to a bank versus a hospital, which is one reason ClearBalance’s performance rates are much better than a hospital-based program. We can also extend the life of loans up to 72 months, or longer if necessary, allowing us to capture more payments—even from those individuals who couldn’t pay in a shorter timeframe but who are still willing to meet their obligations.

In addition to delivering a well-managed and compliant program, we also prioritize the patient experience. ClearBalance is an extension of our health system partners so fostering patient and consumer loyalty on their behalf is critical. We maintain our own customer service center at our headquarters, known as our Patient Experience Center, to address patient questions and concerns throughout the life of the account. We are able to monitor and manage call volume and outreach in real time versus relying on an outsourced customer service center that supports myriad other industry collection programs. Patients also have the 24x7 convenience of using our patient portal to manage their accounts, set up recurring payments, and view statements and account history.

To assess the impact of our program and the value we provide to patients and our clients, we conduct an annual patient survey. Last year’s results indicated that 99 percent of respondents believed that healthcare providers that offer loan programs like ours are providing a benefit to their communities; 94 percent said they would return to their healthcare providers because they had a loan option; and 93 percent would refer the hospitals to friends and family. Interestingly enough, 26 percent said if they didn’t have a loan option, they would have delayed treatment.

What are some key considerations for healthcare leaders when choosing this type of product or service?

Organizations should make sure they are crystal clear on the services a potential outsourced payment solution provides and the benefits it is expected to deliver. To ensure transparency with our health system partners, we created a ROI value model calculator that is peer reviewed by HFMA. It compares a healthcare organization’s current approach to patient collections with a patient loan program, providing valid operational and financial performance metrics that finance leaders find meaningful. We are then able to track actual performance and the financial benefits delivered against the projections.

You should also look for a stable yet innovative vendor that has a depth of experience and is focused on health care and specifically providing loan programs. Many of our competitors do a number of other things besides manage healthcare loan programs; we do not. Servicing healthcare debt is unique. Our patient experience team members understand the nuances and respond accordingly—especially when interacting with patients. It’s a lot different when a person opens a loan to pay for a new stereo system or car versus to pay for treatment for a life-threatening illness: the individual chooses to buy a car, but he or she does not choose to get sick. ClearBalance is not a debt collector. Our organization helps people through rough times, giving them payment options that let them meet their obligations without creating an undue financial hardship.

Since the marketplace is constantly changing, you also want to work with a vendor that is responsive to shifting dynamics. Through our proprietary loan servicing platform we can evolve quickly as the marketplace and regulatory environments change and implement new solutions that make it easier for our clients and their patients.

Are there any educational materials you would like to share to assist healthcare providers in these efforts?

For more information, check out our healthcare consumerism executive brief and ROI value model, peer reviewed by HFMA.

HFMA is the nation’s leading membership organization for more than 40,000 healthcare financial management professionals. Business Profiles are funded through advertising with leading solution providers. Learn more.

ClearBalanceContent for this Business Profile is supplied by ClearBalance. This published piece is provided for advertisement purposes. HFMA does not endorse the published material or warrant or guarantee its accuracy. The statements and opinions of those profiled are those of the individual and not those of HFMA. References to commercial manufacturers, vendors, products, or services that appear do not constitute endorsement by HFMA.

Publication Date: Wednesday, June 01, 2016