The 2009 Big Story In Healthcare Banking?
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20 February 2009
As many of our clients are aware, much focus in the healthcare banking industry has been on the advent of tax-advantaged medical spending accounts, especially HSAs (health savings accounts). The current economic crisis has only intensified this focus, as HSAs are seen as a relatively low-cost approach to building and retaining deposit bases. In fact, later this year, Celent will conduct research about the role of HSAs to grow deposits, so please stay tuned. However, my discussions with industry players are revealing that there might be just as an important (if not more important) "big story" in healthcare banking this year. Specifically, I'm referring to revenue cycle management of patient out-of-pocket expenses and what solutions the industry will offer to help healthcare providers collect from consumers of all economic brackets. A quick, back-of-the-envelope calculation highlights the fact that collections deserve at least as much attention as HSAs from the healthcare banking industry. In early-2008, it's safe to assume that there was about $4 billion in HSA deposits (just run with me on this one, if you'd like to challenge this assumption, feel free to contact me). On the other hand, the Center for Medicare and Medicaid Services (CMS) estimated that 2008 out-of-pocket expenses totaled $282 billion. Keeping in mind that in general, healthcare providers only collect about 50% of what is owed them by patients, there is a $141 billion market in improving patient collections. Put another way, this is a 35X opportunity over the HSA opportunity. Through my research, I get the sense that many players are waking up to this story -- we at Celent are certainly interested in it and will correspondingly publish research. In fact, I just completed a report on this subject, so please be sure to take a look: The "Retailish" Future of Patient Collections
Industry or Business Focus
Asia-Pacific, EMEA, LATAM, North America