Self-pay is still on the rise, so don’t ignore it
As the proportion of consultants’ income from self-pay hits a new record, Garry Chapman predicts this trend will continue. Just make sure you have a robust system to collect the money
Many Consultants think of private practice as being the insurance market. But it is not that simple.
Our analysis on the invoice values we raised in the past 12 months shows that the private medical insurance market only accounts for 52%.
The percentage has continued to fall every year since 2012 when it accounted for 66% of the total, with the remaining 34% split between other organisations such as embassies, hospitals, solicitors for medico-legal work – and other commercial organisations.
However, now the lion’s share of this non-private medical insurance invoicing is for self-pay patients, which accounted for an astonishing 33% of the total amount invoiced. This represents a growth from 25% back in 2012 and it is growing year on year at a fast pace.
This figure of 33% is an average across all our consultants and can be significantly more depending upon the specialty, type of practice and the location of the practice.
For almost every client we have, the self-funding patient is either the largest or second largest payment source and, in some practices, they are over 90% self-pay.
There are a variety of reasons why this sector has seen considerable growth and the average of 33% is so high.
The major ones are highlighted below:
Over 90% of the population do not have private health insurance and the NHS is suffering due to the ever-increasing demands put upon it by the ageing population.
This, coupled with the bad press on the quality of care on the ward and the ever-increasing waiting times, is leading to an increasing number of people seeking an alternative to the NHS.
To control the costs of the premiums, the insurance policies have ever-increasing elements which are not covered by the policy.
This will be for a variety of reasons, including benefit limits, patient excess on the policy, coshare policies – where the patient agrees to pay a percentage of each invoice – and certain procedures being excluded.
If your practice is based in central London, then this has always been a part of practice life with patients coming from outside of the UK seeking private healthcare.
There has always been a percentage of people who have sought private healthcare without having an insurance policy and, due to the reasons highlighted above, this has resulted in an increasing number of people in this market, which makes it very buoyant.
On top of this, due to the everincreasing costs of insurance premiums, people are choosing to self-fund.
The reason that this information is so important is that if you do not know what the statistics are in your own practice, you cannot make sure that it gets dealt with correctly from both a billing and collection process.
In our experience, this is rarely dealt with correctly and there is quite often a lack of clarity regarding billing self-pay patients and also collecting the money.
This results in the practice having a huge amount of outstanding debt, which is either chased on a sporadic basis or not chased at all, resulting in debts that amount to a significant sum of money.
The reasons for this debt can be down to many factors, but typically what we see is a lack of a robust system in place to deal with this element of the practice.
What the practice needs to do is have a system in place to deal with each element of the self-pay with the main ones highlighted below.
When you are going to see a patient who is not a resident of the UK, you need to decide in advance what your charges are going to be, so that it is clear to them exactly what the total cost of the treatment is going to be and then have a discussion about the method of payment.
When we deal wit h t hese patients on behalf of our clients, we quite often collect the money in advance, because once the patient has left the UK, then the chances of collecting payment become almost zero.
A common way of encountering an overseas patient is through the hospital. In this instance, the hospital may well agree to collect all money due from the patient.
But unless you get your invoice to the correct department/contact in the hospital in a timely manner, it is likely that your fee will not get collected. This then leaves you with the problems of chasing the patient for payment after they have left the UK.
The majority of consultants are likely to have an element of patients who are self-pay and therefore they should have a price list and agreed methods of payment made clear in advance so that the patient is expecting an invoice and is prepared to pay either on the day or shortly afterwards.
When doing this for our clients, we have a variety of methods available to us including taking payment on the day by debit/credit card or, depending upon the requirements of the practice, we can even take money in advance.
When you cannot collect payment on the day, you will need to put in place a system where the patient is chased for payment after an agreed period and then chased on a regular basis until payment is collected.
Depending upon the specialty and type of practice, this is normally by far the largest volume of the invoices and is also the hardest to collect.
This is because most patients do not understand their insurance policy and they believe that all costs are going to be met by their insurer, so when they receive an invoice for the consultant’s element of the treatment, it is an invoice they are not expecting.
From our experience, a lot of patients will ignore the invoice, as they are under the misapprehension it is a copy of what has been sent to the insurer; so unless you follow this up with a phone call, it will just be ignored.
Once they are aware that the invoice is correct, then they may contest this with their insurer, as they believe all costs should be met under the terms of their policy.
A large part of what we do on behalf of our clients is liaise between the insurer and the patient to ensure that it is clear who owes the money.
Once the patient accepts that the money is owed by them and depending upon the amount that they owe, then you need to be able to either take payment immediately or agree payment terms.
I believe that conditions are ripe for continued growth in the selfpay market, so it is likely that the practice will encounter more invoices in this sector. Thus they need to make sure that they have a robust system in place.
The alternative is that you could choose to use a billing company which has the expertise and skillset to remove this burden from your practice.