Medical practices of all sizes must make decisions that not only are for the betterment of the services provided to patients, but also for the financial health of the practice. One such decision to be made is if outsourcing to medical billing companies makes sense.
A Cost Comparison
There are two options for medical billing. It can be outsourced or done in house. For most medical offices, the decision is based on the cost of each option. But don’t jump to an overly simplified bottom line number. The real question you should ask is “What are all the real costs that should be compared to make this decision?”
The article Should You Outsource Medical Billing provides a checklist for comparing costs using criteria from Profitable-Practice by Software Advice as well as a checklist of the key factors that should be considered when making this decision. In the end, they conclude that in house billing is actually less expensive, but this may not apply to every case. The costs in several areas must be compared to see how they add up in each category.
When Outsourcing Makes Sense
In the breakdown described above, the article does concede that outsourced medical billing companies are likely to collect on a larger percentage of the bills than an in house operation because they are able to apply better processes, specialized skills, and singular focus to get results. The difference between the in house and the outsourced operations in the article was 60% collected vs. 70% collected respectively. Those aren't bad estimates necessarily, but they may not be giving enough weight to what specialized, more experienced medical billing companies can really do. Some medical billing and revenue cycle management firms are boasting of collection rates that are 90% or higher, and that makes a big difference to the bottom line. Before outsourced companies are discounted as more expensive, the results that they are able to obtain should be carefully analyzed using this criteria or medical billing calculator.
An outsourced billing service option has other benefits that may not be reflected in the numbers. For example, as the article also mentions, there are other factors like convenience, less stress, and enhanced productivity that should not be ignored. Here is how they put it:
The medical billing service takes care of much of the “dirty work” associated with the billing process. It will also follow up on rejected claims, pursues delinquent accounts, and even send invoices directly to patients. The convenience factor is a major reason that providers choose to outsource.
Fewer hours spent on medical billing means more hours the medical practice staff can focus on patients and making the business even more profitable. The time savings along can often make up for any difference in cost. Both options should be considered and weighed carefully by each individual medical office before choosing a means of medical billing.