What aspect of patient revenue is most damaging to your cash flow? The “Cash Flow Desert.”
The Cash Flow Desert spans from time of service until you see the first of what you hope will be payments from the patients in response to their statements. At time of service you may collect a copay or small portion of a deductible. But —your next payment won’t be for another 90-180 days, or more. And, statistically it won’t average more than 10% of Patient Financial Responsibility (PFR).
“VestaPay has secured 6x the amount of patient cash and payment plans as our previous vendor.”
Greg Carda
Chief Financial Officer
Missouri Delta Medical Center
Under normal circumstances, you wouldn’t notice this Cash Flow Desert because your patient treatment dates would be continuous, and your cash flow gaps would be masked by patient payments stemming from treatments months earlier. However, with all hospitals resuming services now after the COVID-19 lockdown and with treatments all starting from roughly the same date, you will see a short-term boost in cash and then? Three to six months of no cash.
Not good.
Especially when you can take immediate steps to avoid this.
Instead, you could set up your patients with a VestaPay Dynamic Balance Adjusting AutoPay plan at time of service. Unlike all other standard auto payment plans, our plan allows you to work with estimates (or more precisely, non-final balances).
How does this work? Easily:
- Say, for example, you estimate a patient has $1,000 of liability
- They cannot afford to pay the whole $1,000 today, so you offer them a plan to pay $100 per month for 10 months
- The plan starts immediately, so you receive $100 today, then over the next four to five months you receive another $100 per month
- By the time you’re ready to send statements, you will have received $500 to $600, or 50-60% of the PFR — about ten times the 5-8% of PFR you would have received under your current system
This is just one example of how VestaPay achieves a 60-70% overall success rate in securing patient payment. Other revenue cycle vendors are essentially debt collectors who chase after patients while leaving you stuck in the Cash Flow Desert for five or six months… or longer!
In addition, the artificial intelligence built into VestaPay’s Dynamic Balance Adjustment feature automatically adjusts the patient’s final balance and number of payments due. It constantly monitors EOB postings and other PFR patient account adjustments down the line, all while keeping the patient’s monthly payments the same, with no additional overhead to you.
The result? You capture nearly 100% of what each patient owes at final billing without having to chase the patients for the balances over and above your initial estimates.
Sample Cash Flow Desert Analysis
Every hospital is impacted by the Cash Flow Desert. Below is just one example of a hospital that’s financially stuck in the sand. Note how VestaPay dramatically improves revenues with our Dynamic Balance Adjusting AutoPay plans:
Assumptions:
Average Patient Financial Responsible (PFR) Balance: $350.00
(after insurance, adjustments, write-offs, etc.)
Average number of patient visits per month: 30,000
Industry average collections of PFR: 10%
POS of average collections of PFR: 4%
Total PFR: 30,000 x $350/Pt./mo.: $10,500,000
Current Patient Billing Process:
| Monthly Projection: | Per Patient | All Patients |
| Time of Service Cash | $14.00 | $420,000 |
| Month 1 after TOS (Cash Flow Desert) | $0.00 | $0 |
| Month 2 after TOS (Cash Flow Desert) | $0.00 | $0 |
| Month 3 after TOS (Cash Flow Desert) | $0.00 | $0 |
| Month 4 after TOS (Cash Flow Desert) | $0.00 | $0 |
| Month 5 after TOS (split of 6% over three months 2%/mo): |
$7.00 | $210,000 |
| Month 6 after TOS (2%/mo): | $7.00 | $210,000 |
| Month 7 after TOS (2%/mo): | $7.00 | $210,000 |
| Month 8 after TOS Average total patient PFR collected: |
$35.00 | $1,050,000 |
| (No further payments, balance of $315.00/Pt. PFR written off to Bad Debt) | ||
VestaPay Patient Billing Process with Dynamic Balance Adjusting AutoPay plans:
Patient is enrolled in VestaPay DBA AutoPay Plan ($350 / 10 Payments)
| Monthly Projection: | Per Patient | All Patients |
| Time of Service Cash |
$35.00 | $1,050,000 |
| Month 1 after TOS (Consistent Cash Payments) |
$35.00 | $1,050,000 |
| Month 2 after TOS (Consistent Cash Payments) |
$35.00 | $1,050,000 |
| Month 3 after TOS (Consistent Cash Payments) |
$35.00 | $1,050,000 |
| Month 4 after TOS (Plus All Addtl Patient Resp. Balances) |
$35.00 | $1,050,000 |
| Month 5 after TOS (Plus All Addtl Patient Resp. Balances) |
$35.00 | $1,050,000 |
| Month 6 after TOS (Plus All Addtl Patient Resp. Balances) |
$35.00 | $1,050,000 |
| Month 7 after TOS (Plus All Addtl Patient Resp. Balances) |
$35.00 | $1,050,000 |
| Month 8 after TOS (Plus All Addtl Patient Resp. Balances) |
$35.00 | $1,050,000 |
| Month 9 after TOS (Plus All Addtl Patient Resp. Balances) |
$35.00 | $1,500,000 |
| Average total patient PFR collected: | $350.00 | $10,500,000 |
Average total patient PFR collected:
Current process: $1,050,000
With VestaPay: $10,500,000
VestaPay = 10x the revenue
The VestaPay Dynamic Balance Adjusting AutoPay Plan system is proven in multiple hospitals, across many different patient and Payor demographics, as well as in all departments within hospitals. Allowing for an average 5-6% default rate, hospitals are able to secure 94% of enrolled PFR including additional patient responsible balances with VestaPay that can only be determined months after discharge.
Need to improve your financial position immediately? VestaPay can be deployed almost instantly and with limited IT resources required. In a 20-minute phone call we can walk you through how we achieve these outcomes in a manner that is tailored to your facility and financial constraints.
