Online Medical Records Could Change Healthcare Receivables Strategies

April 10th, 2008

The concept of a centralized repository for personal medical records has been around for some time. Personal Health Records, or PHRs, are individual health records that are stored in a central repository – often online – and incorporate patient data from a variety of sources such as doctors and hospitals, insurance companies, and most notably the consumer himself. The consumer maintains this data and can grant access to those parties he authorizes to retrieve information.

PHRs allow health care providers in various locations to contribute to a patient’s medical history, while simultaneously allowing the consumer herself to view and add to that record. Whereas in the past, records of treatment for the same patient at a hospital in San Francisco and a clinic in Buffalo would have had to be manually compiled routinely by facsimile if at all, PHRs afford providers in both cities the opportunity to view a complete medical history, almost in real time.

Several prominent web firms like Google and Microsoft, and insurance providers like Aetna, have begun publicizing their plans to launch PHRs, but hundreds of smaller-scale offerings are already available to consumers. As this technology takes hold, there are a number of ramifications that could positively and negatively impact the market for healthcare receivables:

Reduction in billing errors
Decentralized billing procedures are the cause of major inefficiencies at many U.S. hospitals. Were a hospital to pair its ventures in centralized billing with the online platform of a commercial PHR, the hospital could market the broad-based program to consumers, reduce full time employees, and likely improve recoveries on the back end of the revenue cycle.

Reduced delinquencies
When patients can materially appreciate the transparency of their hospital bill, and see it integrated with their own medical records, greater ownership – of one’s health and one’s share of the responsibility to pay for it – are likely to follow. In addition, a set of analytics to determine candidates for charity care assistance could be built into PHRs, granting increased compliance control with the new IRS Form 990 for hospitals. This would help better identify patients in need of financial assistance before account delinquencies ever come into play.

Better chain of title may facilitate debt sales
The healthcare debt buying market could reasonably benefit from PHRs. One of the key components often missing from bad debt portfolios is the media that establishes legal chain of title. The absence of such media significantly devalues portfolios for sale, and a centralized, electronic warehouse of this information would boost the potential for hospitals (and debt buyers) to earn revenue from the sale and purchase of healthcare debt portfolios.

Increased leverage in the collection of delinquent debts
The federal judiciary has yet to take up the issue of patient privacy rights associated with commercial PHRs. In the absence of any legal precedent, healthcare creditors and their collection agency partners may perhaps discover new inroads – and increased leverage – when patients with the means to do so are reluctant to meet their financial obligations for healthcare debt. Hospitals and collection agencies will more easily be able to substantiate their claims for valid debts as a result of PHRs.

This is excerpted from the article "The Tangled Web of Google Health – Online Medical Records Could Change Healthcare Receivables Strategies" on

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