Community-based hospitals face an uphill financial battle amid evolving macroeconomic realities: Operational costs—from supply chain to labor—continue to rise; insurance reimbursements are going down; and denials are skyrocketing. Now add Medicaid funding uncertainties that accompany the One Big Beautiful Bill to that mix, and rural hospitals especially must become proactive in speeding reimbursement to maintain healthy operational margin.
Yet rural, community-based hospitals like Goodall-Witcher Healthcare in Clifton, Texas, often lack the kind of real-time visibility into billing and payment that can improve the outlook. For example, billing reconciliation practices characterized by manual, paper-based processes are common and can result in bottlenecks and delays. Also, patients receiving paper billing statements from current EHR systems must often weed through details that are hard to decipher and sometimes inaccurate.
Maintaining this kind of status quo is not sustainable in the current economic climate. Rural health must embrace payment transformation that is digital-first and patient centered to improve financial performance and remain viable.
Speeding Payment Through Greater Transparency, Accuracy
Community-based hospitals are plagued by rising bad debt. Almost half of rural hospitals are operating in the red, and trends suggest that bad debt is on the rise, according to Kaufman Hall’s hospital flash report. Notably, the report points to a perfect storm of contributing factors including higher rates of denials, an uptick in emergency department (ED) visits from uninsured/underinsured patients and larger volumes of higher-acuity hospital patients.
While these ongoing trends are largely out of a hospital’s control, there is opportunity to improve operational margin with better billing and payment processes. For example, one question rural healthcare organizations should be able to answer on any given day is: How much have I collected on outstanding invoices?
Far too many rural hospitals lack infrastructures that can readily confirm what bills have been sent out and what payments were collected. When Goodall Witcher began its payment transformation, a deeper analysis revealed major discrepancies in billing from existing systems. Had the financial team had the ability to run reports at the end of the day to reconcile payment, discrepancies could be identified and addressed to vastly improve collections.
Automated payment reconciliation, which matches incoming electronic payments to invoices—improves accuracy and cash flow. It also removes the administrative burden and inaccuracies of manual reconciliation, allowing staff to focus on more high-level tasks. Best in class approaches can holistically reconcile payments coming from a variety of sources including payer-collected and direct patient payments with a high degree of accuracy—at least 90% or higher.
Patient Financial Experience: A Delicate Balancing Act
Patient experience is critical to strategy for all healthcare providers, but in rural areas where many people know the c-suite by name, it is central to building trust and healthy communities. Relationships matter, and the financial experience a patient has with healthcare is often the last and most memorable part of an encounter.
And the reality is that consumers overwhelmingly desire mobile payment option for healthcare, with just 17% of consumers paying their bills via paper check, according to JP Morgan. Also, a PCMI survey found digital wallets such as Apple Pay, PayPal, Google Pay were used in one out of three consumer and business transactions in 2024.
Goodall Witcher sought to improve the patient financial journey by investing in digital experiences that would ensure billing was reliable and accurate, and payments were easy to navigate. This would not only minimize delays to speed revenue capture but would also minimize confusion and repeated phone calls from frustrated patients. Since taking this approach, Goodall Witcher has captured over 8,400 bills totaling $816,000. Furthermore, it has received over 870 payments through payment plans offered to patients at 0% financing.
Setting the stage for successful payment innovation
Healthcare has learned the hard way that simply deploying technology without a well thought out plan for buy-in often results in lackluster adoption and performance. Communicating with patients in advance about the what and why of coming changes is critical to long-term success. The best strategies consider a multi-channel approach using social media, signage in the hospital and direct interactions between staff and patients.
Payment innovation that is digital-first and patient-centered is central to improving bottom-line performance for community-based hospitals. Forward-thinking collections strategies consider patient payments from all avenues including self-pay and payer-collected patient balances. The right blend of automation, payer/provider collaboration and patient engagement and reporting can effectively speed billing and reimbursement timelines, improve patient financial experience and close gaps in collection of patient copays.
Jerry Pickett
Jerry Pickett is CFO for Goodall-Witcher Healthcare.
Tom Furr
Tom Furr founded PatientPay, a healthcare revenue cycle management platform, based on his experiences with antiquated healthcare billing and payment systems. PatientPay solely focuses on moving healthcare beyond the traditional printed statement, paper check handling, and unused online portals. Prior to founding PatientPay, Tom was the CSO/COO and Board member at MobileSmith Health. He was also a co-founder and president of Kinetics, Inc., an early online commerce provider for small businesses with partners such as Wells Fargo, First Union, and Netscape.
