Thursday, March 12, 2009

The CDH Paradigm Shift

By Mark Brousseau

The move to Consumer Directed Healthcare (CDH) plans is a game-changing event in medical banking, Stuart Hanson (, vice president, Healthcare Solutions, Fifth Third Bank, said this afternoon during a presentation at the Seventh National Medical Banking Institute.

Hanson noted that CDH plans grew by 43 percent in 2008, with consumers spending an eye-popping $250 billion on out of pocket healthcare expenses (cash, check, credit, debit and automated clearing house). As a result of these trends, more than 20 percent of healthcare providers’ revenue will come directly from patients, Hanson said. Moreover, the impact of consumer-directed healthcare is only starting to be felt, and there is a building wave of demand behind it, he added.

“This turns the revenue collection model on its side,” Hanson said. “To manage this paradigm shift, and minimize the negative financial impact of CDH growth, processors will need new technologies, tools and processes. In a CDH world, providers must re-engineer their processes to more effectively capture, track and manage patient debt,” Hanson said, noting that most provides are challenged by outdated systems and limited electronic and paper connections for real-time reporting and processing.

Against this backdrop, Hanson believes that banks are well-positioned to help providers deal with the shift to CDH plans through retail lockbox, wholesale lockbox, and remote deposit capture services.

What do you think? Post your comments below.

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