Kaulkin Ginsberg: Healthcare Industry Sets Aside $129 Billion Annually to Cover Bad Debt

Kaulkin Ginsberg Company, the leading provider of M&A, strategic advice, research, and information for the Accounts Receivable Management (ARM) industry, has released Healthcare ARM Report, 2006. This research publication describes healthcare receivables management from the perspective of healthcare providers and ARM companies.

This original research concludes that healthcare providers set aside $129 billion annually to cover bad debt — roughly 7 percent of the industry’s revenues, and more than double its average net profits of 3 percent. As a result, ARM companies that provide healthcare providers with receivables management services have seen increased demand for their services. The healthcare sector of the ARM industry generated $2.4 billion in revenues in 2005.

“Bad debt may be the most pressing financial problem of the healthcare industry,” said Paul Legrady, Director of Kaulkin Ginsberg’s Research Group. “This research illustrates how healthcare providers and ARM companies are collaborating to confront this challenge.”

A whitepaper describing the major findings of this research is available, free of charge. Subtitled “11 tips for improving returns on healthcare receivables,” this 5-page whitepaper provides examples of effective strategies for managing healthcare receivables:

1. Acknowledge the impact of self-pay patients

2. Start early

3. Use different services for different purposes

4. Negotiate based on price, but only to a point

5. Benefit from fragmentation

6. Maintain community reputation

7. Turn regulatory compliance into a competitive advantage

8. Borrow some lessons of credit card collections

9. Consider debt buying

10. Lean on vendors

11. Plan strategically

To download this whitepaper, visit http://www.kaulkin.com/research/publications/hc/white_paper.cfm.

Kaulkin Ginsberg is the parent company of CollectionIndustry.com.