A healthy payer mix is a vital metric for your medical practice because it affects the revenue stream and your bottom line. Every healthcare institution should track the payer mix and manage it carefully to adjust to the changing demands of the market. Read on to discover what a payer mix is, what a healthy managed payer mix looks like, and how Peregrine Healthcare can help your practice improve revenue through payer contracts, credentialing, and payer enrollment in Houston, Texas.
What Is a Payer Mix in Healthcare?
A payer mix represents a percentage of revenue coming from private insurance, government healthcare plans (Medicare and Medicaid), and self-paying patients. It is vital for your practice because it directly determines your revenue. That’s because private payers like UnitedHealth Group, Cigna, Aetna, or Anthem typically pay more than Medicare and Medicaid for the same services.
Most medical practices receive most of their revenue from private payers and self-paying patients. A smaller percentage comes from government healthcare plans. However, your payer mix can change depending on different socioeconomic factors. For example, we saw a significant shift in the payer mix at the start of the COVID-19 pandemic. That’s because many people lost their jobs and private health insurance that came with it. So, self-paying patients and government healthcare plans became more common.
A payer mix shows what percentage of your revenue comes from self-paying patients, private insurance companies, and government healthcare plans.
How Do You Calculate a Payer Mix?
If you want to calculate your payer mix, it is relatively simple. You need to identify the revenue coming from each payor and then group private payers, government plans, and self-paying patients separately. Once you have the income sum for each category, divide it by total revenue and multiply by 100. The results will show you what percentage of income comes from each type of payer.
Having this data will help you track patients’ costs, your return on investment, and other vital financial parameters of your healthcare practice.
You can calculate your payer mix by dividing the revenue of each type of payor by the total income and multiplying it by 100.
How Does a Payer Mix Affect Your Revenue?
If you are running a healthcare practice, you are aware that government programs like Medicare and Medicaid typically pay less than private payers and self-paying patients. So, your revenue can improve if your payer mix has a higher percentage of self-paying patients or those with private insurance. That’s why you can implement strategies to influence your payer mix and improve the bottom line.
Self-paying patients and private payers compensate your practice at a higher rate, which is why you want a higher number of these cases in your payer mix.
How to Manage Your Payer Mix to Improve Revenue
You can take certain actionable steps if you want to improve your payer mix and boost revenue. Here are our top three strategies for strengthening your payer mix.
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Use Ads to Attract More Customers
Paid advertising is a great way to reach more people and turn them into patients. The great thing about this strategy is that you can personalize your campaign and target specific demographics with low-cost ads. That way, you can get a significant return on investment and boost your profits.
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Target High-Value Patients
Once you calculate which patients give your practice the highest return, it’s time to double down on them. Invest in digital marketing and channels to reach more of these high-value patients and watch your payer mix improve.
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Work on Your Reputation
Some patients seek the best possible medical providers without caring whether they are in the network or not. These self-paying patients can be valuable to your payer mix, but you must have an excellent reputation to attract them.
Unfortunately, providing outstanding service is only one part of the equation. You should also focus on your online presence, brand recognition, content marketing, authority positioning, and other factors that improve your reputation.
You can manage your payer mix by improving provider reputation, using paid ads, and targeting high-value customers.
Payer Mix Management, Payer Contracts, Credentialing, and Payer Enrollment in Houston, Texas
If you need help with your payer mix, negotiating better payer contracts, credentialing, or payer enrollment, Peregrine Healthcare can help. We are a full-service healthcare consultant agency with extensive experience helping practice owners streamline processes to improve efficiency and boost revenue.
Contact us to learn how you can get ahead of the competition and attract more high-value patients to your practice.
