Meg Bryant, writing for Healthcare Dive, discusses nine ways in which hospitals can reduce debt:
1. “Understand your costs of care. Hospitals make money taking care of patients, so their debt needs to be clinically proportionate to the types of services they provide….If a hospital has large surgery needs, it will require lots of operating rooms, which are expensive to implement and maintain. …. Make sure the capital structure is appropriate to the model of care needed or the risk profile of the patients the hospital treats.”
2. “Improve ICD-10 coding on claims forms. Not coding appropriately and not coding for the proper amount of time the doctor sees the patient or for interactive effects can cause reimbursement rates to plummet….”
3. “Renegotiate rates with insurers. Larger, more prestigious hospitals and health systems are able to extract much higher reimbursement from private payers than less prestigious ones, even in the same geographic area. Hospitals can increase volume and revenues by convincing health plans to increase rates and then direct patients toward the less-expensive hospital.”
4. “Increase efficiencies and productivity. Another thing hospitals can do is make sure nurse practitioners, nurse, LPNs, and other clinicians are operating at the top of their license. {N}urse practitioners can perform many of the tasks a physician does, but at a lower cost of care.”
5. “Manage risk. This is something that all hospitals are having to do under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), but it is also a good way to reduce costs and knock out debt. Focusing on high-risk patients to reduce costly inpatient stays can have a rapid return on the bottom line. Coupling that with narrow networks of high-quality, low-cost physicians may increase referrals from health plans and enhance reimbursement rates.”
6. “Refinance or restructure to cut debt. Hospitals can also work with capital market organizations to see if there are ways to refinance or restructure to reduce the debt burden….”
7. “Divest property. ”
8. “Reduce ‘bad’ debt. To increase the odds of getting paid, some hospitals are training patient access staff to identify patients who may default on payment and putting in point-of-service payment plans. Some hospitals have also set up space to enroll uninsured patients in Medicaid….”
9. “Join a health system.” Get the efficiencies from being in health systems, as opposed to being a single hospital. With a system you have the credit worthiness of the whole system behind you, probably getting you lower interest rates.
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