Kaulkin Research Makes Available Free Whitepaper on Healthcare ARM

by Patrick Lunsford, CollectionIndustry.com

The U.S. healthcare industry is enormous, representing one in every six dollars spent in this country, or roughly $2 trillion, in 2005. The aging of the population and other macroeconomic trends suggest that this industry will grow moderately for the foreseeable future. Part of this growth has heightened an industry problem: more bad debt. Healthcare providers in the United States set aside $129 billion annually to cover bad debt, amounting to roughly 7 percent of the industry’s revenues – and more than double the industry’s average net profits of 3 percent. As bad debt has caused profitability to wane, healthcare providers have partnered more with companies that specialize in the collection of delinquent receivables.

To specifically outline the growing sector of the accounts receivable management industry, Kaulkin Ginsberg Company’s Research department has issued their latest report, Kaulkin Ginsberg’s Healthcare ARM Report, 2006. This 60-page research publication was developed in the second and third quarters of 2006 in partnership with healthcare providers and receivables management companies throughout the U.S. The report is sponsored by LexisNexis and Hospital Billing & Collection Service (HBCS). A free 5-page whitepaper taken from the report is now available for download on the Kaulkin web site. Here is an excerpt from the whitepaper:

The healthcare sector of the accounts receivable management (ARM) industry generated $2.4 billion in revenues in 2005. All signs suggest that this figure is likely to grow as healthcare providers utilize these service providers in the pursuit of receivables.

Whether healthcare providers and receivables management companies can maintain levels of profitability during this period of revenue growth remains another question entirely. Downward movement in prices, increased competition, and a variety of regulatory threats pose real challenges to companies in both industries.

Healthcare providers and receivables management companies must work collaboratively to confront the challenge of bad debt. This whitepaper describes 11 ways in which this collaboration is improving return on healthcare receivables:

1. Acknowledge the impact of self-pay patients
2. Start early
3. Use different services for different purposes
4. Negotiate based on price, but only to a point
5. Benefit from fragmentation
6. Maintain community reputation
7. Turn regulatory compliance into a competitive advantage
8. Borrow some lessons of credit card collections
9. Consider debt buying
10. Lean on vendors
11. Plan strategically

For more on each of these points, and to download a free copy of the whitepaper, please visit Kaulkin Ginsberg's Research Group.

Kaulkin Ginsberg is the parent company of CollectionIndustry.com.

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