As the sputtering economy looms at our doorway, ready to settle in as an unwelcome houseguest, Americans are already feeling its effects: higher fuel prices, soaring airline fares, grocery bills that demand a double take, fewer road trips and family vacations planned over the summer.

And although the healthcare industry has often been coined “recession-proof,” these days it is not so immune to thinner wallets and more careful spending. That’s because more and more Americans are paying out-of-pocket for their own healthcare, instead of being covered by third-party payers.

These “self-pay” patients are rising in number, due to an increase in the uninsured and underinsured populations, as employers cut jobs and benefits to save money. In addition, even for those patients with medical insurance, deductibles, coinsurance and co-payment amounts have grown so large because of the shift to “consumer-driven” healthcare that even they have a hard time paying medical bills. In fact, an increasing number of individuals with the financial capacity to purchase insurance are opting to “go bare” — without coverage — due to the high cost of health insurance premiums that also carry out-of-pocket obligations.

Hospitals and other healthcare service providers are struggling in this environment, one where they can no longer solely rely on the relative certainty of post-service payments from private insurance companies and government programs such as Medicare. Collecting upfront payments from self-pay patients can be difficult without appropriate technology, systems and staff in place, and many experts point to uncollected payments from self-pay patients as the main culprit of the rising bad debt within the healthcare industry.

To ensure their financial viability, many providers are adopting new processes that focus on the front end of the revenue cycle, rather than concentrating on those back-end collections. Indeed, in this tight economy, collecting payments is more important, and tougher, than ever, and hospitals and other providers must adapt and change their processes or face some pretty dire consequences.

Collecting payment from individuals on the front end is much more effective than post-service, which can be expensive and futile, especially if inadequate information is obtained at registration.

There is much room for improvement in the revenue cycle process. A recent nTelagent, Inc. study, which looked at 40 healthcare service providers’ aged trial balances, found that approximately 50 percent of patient accounts with capacity to pay were written off as bad debt, instead of being re-billed or outsourced for collections. Another 17 percent could have been eligible for government assistance or charity care programs but were also written off. Finally, the study showed that more than 30 percent of accounts were classified as bad debt because income and net worth data were unavailable, revealing that adequate personal information is often not collected or verified on the front end.

Clearly, the missed opportunities for collection are tremendous. One way providers can significantly improve on this industry-wide problem is to focus on the front end of the process, ensuring patient access staff members are appropriately trained and given the tools and systems they need. Many healthcare service providers have invested so heavily on the back end that it is difficult for them to change to front-end processing. Web-based systems can be a good alternative for providers in this situation since they involve a transaction fee and not a large investment in hardware and software.

Today, the responsibilities of patient access departments are far more comprehensive than in the past and can have a major impact on a facility’s revenue cycle. In addition to scheduling appointments and checking in patients, patient access staff are now reviewing referrals, obtaining authorizations, verifying eligibility, validating demographic information, determining charity care and discounts, requesting payment at time of service, and other complex tasks that were once handled in other areas of a facility. It is often the case, however, that these staff members are not provided with the proper tools, training or support to effectively manage their new responsibilities.

Implementing a system that effectively supports patient access staff is essential for healthcare providers. Such a system should provide customized, step-by-step scripts based on a service provider’s own business rules, to intuitively guide patient access staff through the complex revenue cycle processes mentioned above.

The results? Providers will see improved front-end revenue cycle operations because accounts will be accurately classified regarding capacity to pay, leading to increased overall and upfront collections and a decrease in bad debt. In addition, patients will have a better experience, due to improved communication about financial responsibilities from the outset.

A system that manages self-pay accounts is an effective, easy-to-implement means of streamlining, simplifying and clarifying the patient access staff’s responsibilities — turning even the most inexperienced registrar into an expert.

Earl T. Winter is chairman and CEO of nTelagent, Inc., whose Self-Pay Management System provides online scripting for registrars and financial counselors. www.ntelagent.com