Although you're probably facing shrinking insurance reimbursements and high overhead, you should consider improving the service you provide to your patients, perhaps even by hiring an additional staff member. But, you argue, good service costs money, right? Not necessarily. Successful business people try to keep their customers happy because they know it's easier to retain customers than to attract new ones. Just as customer loyalty is important in business, patient loyalty is important to your practice's financial health.

One way you can increase your patients' loyalty is by giving them a patient account representative — a staff member who facilitates the business side of your relationship with patients by taking full responsibility for patients' accounts.

Traditionally, patient accounting tasks are divided among several staff members, such as receptionists, cashiers, billing clerks and insurance clerks. Fragmenting these responsibilities often leads to miscommunication and buck passing, which turn small issues into big problems that can take a long time to resolve. (For a particularly striking example of one patient's billing problems with her insurers and physicians, see “Paper Chases of a Cancer Patient” in the March 1 Wall Street Journal.)

Making patient accounts the responsibility of one staff member, the patient account rep, reduces these problems and lets patients know exactly where to turn when questions or problems do arise. Patients will appreciate your effort to make it easier for them to deal with your business office and their insurance plans. Their loyalty will translate into retention, which means you'll spend less time and money attracting new patients.

The role of an account rep

A patient account rep's work begins with a patient's first visit. The account rep interviews the patient to obtain demographic and insurance information. A personal, private interview is a much warmer welcome to your practice than asking the patient to balance a clipboard on his or her knee and fill out a form.

During the interview, the patient account rep explains the practice's care system, including the roles of nurses, medical assistants and other staff members; how to schedule appointments; and how to reach a physician in case of an emergency. The patient account rep explains how the patient, the practice and the patient's insurance plan work together, and he or she outlines the practice's expectations about payment. The account rep can reinforce all this information by reviewing your practice's brochure with the patient. He or she concludes the interview by answering questions and by encouraging the patient to call with any others.

The account rep also works with insurance plans to authorize payments to the practice, resolves patients' billing and insurance problems, and collects delinquent accounts. To provide an extra measure of well-appreciated service, the account rep can also coordinate patients' appointments with other physicians and ancillary services, if the demands of your practice will allow it.

In smaller practices, patient account reps may have additional duties, such as posting transactions, serving as the primary contact with one or more insurance plans or maintaining the computer system. Larger practices may have several full-time patient account reps who focus almost exclusively on working with patients. In any setting, the account reps may rely on their coworkers with specific expertise to do specific tasks. Regardless of any other tasks account reps may perform, their primary function is to serve as the sole point of contact for patients who have questions about their accounts.

In my practice?

Before you protest, “We can't afford that,” weigh the costs and the benefits. You already employ staff members who work with insurance plans, resolve billing and insurance problems, and collect delinquent accounts. Depending on your circumstances, you may be able to reorganize their work and concentrate it in the hands of one (or more) of them as a patient account rep rather than hiring additional staff. In that situation, assigning these tasks to an account rep involves no additional cost, and having an account rep do them personalizes the service for the patient.

The cost of a new-patient interview involves about 20 minutes of staff time, plus the use of a private office with a computer workstation. The benefit is that this interview anticipates many of the patient's questions and answers them before they turn into problems.

Admittedly, coordinating patients' referral appointments does take extra time, and this won't work for all practices. However, whatever level of service your account rep can provide will pay off in increased patient satisfaction and loyalty.

Don't underestimate the benefits of loyalty. Loyal patients are more likely to pay their bills. Loyal patients are more likely to work to keep you as their physician when they change insurance plans; in fact, some will bear higher out-of-pocket costs in order to continue seeing you. Because you and your loyal patients know each other well, encounters with them tend to be efficient and you run a lower risk of malpractice.

Consider also the costs of patient turnover. How much time does it cost you to send a patient's records to his or her new doctor? How high is the cost, in time and in marketing dollars, of attracting and registering new patients to replace those who leave?

Finally, think about the value of just a single patient over a year, 10 years, 20 years or longer. One loyal patient can easily generate thousands of dollars of fees or capitation payments over the course of your relationship. Considering this, using account reps to improve your business relationships with patients may be more cost-effective than you'd think.