QAS helps reduce hospital's bad debt levels by 50%

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The challenge

Like many hospital financial administrators, James Bowden, Director of Patient Financial Services at Saint Peter's University Hospital in New Brunswick, New Jersey, needed to reduce his organization's bad debt expenses. The hospital handles 30,600 inpatient admissions, over 50,000 emergency room visits, and 250,000 outpatient visits each year. The hospital bills over $1 billion in gross charges annually.

"We have approximately $27 million in bad debt expense each year. To a certain extent, it's the nature of the business. There are patients who can't or won't pay their hospital bills and we have to write off that money to bad debt expense. What bothered me most was the level of bad debt that we were able to attribute directly to address problems. Our pre-collection agency reported that they couldn't find about $3 million of our accounts due to bad addresses. Bad address errors are a correctable problem and losing money to them is just not acceptable," Mr. Bowden said.

The solution

Mr. Bowden and his team began researching ways to correct the faulty address data in their McKesson Series Hospital Information System. They evaluated QAS Pro, which validates addresses against official U.S. Postal Service® records during entry into the database.

By getting addresses right before they even enter a database, QAS Pro can help organizations save money on everything from shipping to printing, billing cycles, and returned mail. QAS Pro works at the keyboard buffer level, filling in complete, valid addresses in real time without necessitating major changes to business processes and systems.

"We tested QAS Pro in our main registration and ER registration areas," said Mr. Bowden.

"Integration with McKesson took a bit of coding, but QAS sent a software engineer right here to do it for us. It became apparent right away that this system was going to save us money," he added.

The results

Mr. Bowden attributes QAS Pro with a 50% reduction in bad addresses, reducing the $3 million in losses attributable to bad addresses to $1.5 million.

"Accepting the fact that all hospitals experience bad-debt related issues is a well known fact of life, but accepting a situation that can be corrected is another matter. With a simple software solution on top of our database, we achieved a stunningly successful ROI and made significant inroads into our bad debt problem," he said.

Mr. Bowden is very happy with the way QAS Pro works. "It really does work in real time. Adding that QAS validation doesn't slow up the registration system, which is a major benefit when you have a huge population of people waiting to be registered for services."

Next steps

Saint Peter's University Hospital recently added QAS Names, which validates names as well as addresses, to their debt reduction strategy.

"Having the names connected to our demographic database of addresses will help us attack the problem at the front end even more effectively," Mr. Bowden reports. "If a new patient registers with the name Joe Smith and says he lives at 123 Main Street, the software will search its records for the proper parties living at that address. If the name does not appear, the registration associate can say that we don't have a record of you at that address and they can ask for more identification. This is another way to encourage people to provide valid demographic information."

"We have found a gold mine in this product and I am very happy to recommend it to the Healthcare Financial industry," Mr. Bowden concluded.

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