Receiving a letter from a debt collector is unlikely to aid recovery after hospital, writes Kathy Burke
Around the beginning of the decade, the health boards, statutorily responsible for collecting hospital charges, began to outsource collection of unpaid bills to debt-collection agencies.
Methods used by these agencies to effect payment from individuals have been described as intimidating in other sectors. In the health sector, debtors are patients and the bill is for medical treatment. Are methods that are designed to put maximum pressure on the debtor to pay, appropriate?
A letter sent to a patient last summer by Legal & Trade Collections (Ireland) reads:
"Please pay the above amount IMMEDIATELY If within SEVEN DAYS the account remains unpaid or acceptable reasons for non-payment are not given, our instructions are to: Fully PURSUE THE ACCOUNT for the balance. I trust you will pay this account immediately and avoid having your name retained on our bureau for non-payment."
The debtor in question had found himself in an A&E department undergoing tests for bladder cancer just weeks after having a malignant melanoma removed from his face.
He says the then €45 A&E charge didn't occur to him as an immediate priority.
"It was a highly anxious time where the worst-case scenario and the consequences for my dependants had to be given serious consideration," he said. "A health scare certainly puts things in perspective."
His wife paid the charge six weeks after the visit and within three weeks of a health board reminder notice.
The debt-collector's letter and the health board's receipt for payment arrived in the post on the same day.
The hospital's finance department immediately apologised for the cross-over.
The patient says: "Consider the stress that letter would impose on an aged couple or a low-income family with young children where the earner is seriously ill."
Legal & Trade Collections (Ireland) was the Irish subsidiary of the US-based IntelliRisk Management Corporation.
It was acquired by Intrum Justitia in October last year. Intrum Justitia operates in 21 countries in Europe, with headquarters in Stockholm.
Before the opening of the Health Services Executive in January this year, some - but not all, health boards spoke about their debt collection procedures.
A spokeswoman for the Western Health Board, (now, HSE, Western Area), said that in 2000, as "part of a value-for-money initiative", it evaluated debt-collectors and solicitors for the purpose of collecting uninsured outstanding debt.
"The debt collectors were chosen as a result of having better collection rates and being more economical, and were approved by the board's finance committee," the spokeswoman said.
She also said that the number of debtors has increased since 2002, due to "increased charges and increased activity in the board's acute hospitals", and that it increased its focus on debt-collection following a Public Accounts Committee meeting in 2003.
On the €45 A&E charge cited above, €5.08 was added; an increase of 11.3 per cent. The spokeswoman explained that when an account is referred to debt-collectors, an additional charge is applied to recover the additional cost of collection. The commission paid can often be as much as 12.5 per cent of the bill.
The Midlands Health Board, (HSE, Midlands Area), said the value of unpaid accounts per-year averages at about 4 per cent of patient accounts, or €220,000. That board also reviewed its debt-collection process in 2003.
The South Eastern Health Board (HSE, South Eastern Area) revealed that €5.2 million was outstanding for private bed services in its hospitals for 2002, adding that a proportion of that sum would have been subsequently recovered. A spokesperson said that about 2 per cent of its accounts are referred to legal and financial advisers for recovery.
In 2004, up to early December, the East Coast Area Health Board (HSE, East Coast Area) said it paid €30,374 for debt-collection by agencies. "The number of outstanding debtors has improved substantially, for example, from 55 per cent to 74 per cent collection-rates for A&E charges from 2003 to 2004," the board's spokesperson said.
"In an operating environment where staff ceilings apply, the use of debt collection agencies represents a saving of one whole-time equivalent administration grade," the spokesperson continued.
"In addition, as agency charges are structured on a no-foal-no-fee basis, [the board] only pays based on successful collections, which represents value-for-money, savings which can be ploughed back into patient care."