Legislating Healthcare Funding and its Effects on ARM

We’ve seen a lot of news and references lately to healthcare accounts receivable management, not only on this site but in all corners of the industry.  ACA International even recently chimed in on the subject.

So if healthcare collections is going to be the next big thing, what do we need to know?  A lot of this information is covered in a great research study – the Healthcare ARM Report, 2006 – published by Kaulkin Ginsberg, parent company of insideARM.com.  But one variable in the equation requires a fairly steady stream of updates: legislative movement, on both the federal and state level.

Recently, an insideARM.com reader emailed a question that initially had us stumped: if the U.S. were to adopt a single-payer healthcare system, wouldn’t healthcare accounts receivable management be effectively nullified?

As with most things, the answer is pretty complicated.  First, it helps to understand what single-payer healthcare is and why it’s even being discussed as a possibility. 

When lawmakers refer to single-payer healthcare, most opponents claim publicly they are talking about socialized medicine.  But single-payer healthcare and socialized medicine actually refer to two totally different things.  Socialized medicine is a system in which hospitals are run by the government and medical professionals are employed by the government.  Single-payer healthcare exists when a single government entity pays for all health care costs; it refers to the financing mechanism of the system rather than the delivery system as with socialized medicine.  Of course, the end result is effectively the same: the government is paying all medical costs.

So in a short answer to the reader’s question: single-payer healthcare would not nullify medical ARM, but it would certainly marginalize it.  There would still be a handful of private medical practices that cater to the upper class and those seeking elective procedures like cosmetic surgery.  And it can be assumed that some of those patients would default on their bills, thus necessitating some ARM action.  But by and large, if a single-payer healthcare system was ever introduced in the U.S., we would no longer be hyping up healthcare collections as the next big thing.

But is single-payer healthcare even a possibility on the national level?  The name most commonly associated with single-payer healthcare is Senator Hillary Clinton (D-NY), the ostensible leading candidate for the 2008 Democratic Presidential nomination.  But most opponents to the left of Clinton argue that she has abandoned her mid-‘90s push for single-payer healthcare in favor of the more pragmatic universal healthcare plan.

Universal healthcare refers to a legislative mandate that states every person in the country, or a state, have access to some type of healthcare coverage.  The most common type of coverage in the U.S. is private medical insurance, usually provided through employers.  In the absence of private coverage, the U.S. government has set up programs like Medicaid and Medicare to cover those who can’t afford private coverage.  And generally, health plans are honored at private as well as public hospitals.  So on the federal level, the U.S. has a true hybrid healthcare system.