A recent episode from a hospital drama series showed one chief of staff taking the time to consider a unique approach to debt collection. Threatened with the fact that the board of directors was going to sell the outstanding debts to a debt collection agency, the chief of staff was desperate to find another solution. When the chief of staff found out that the hospital was going to get 10% on the dollar of the debt that was owed, he was certain he could come up with a better solution. The board of directors said that would allow 24 hours.
What followed were several detailed conversations with patients who owed money. The chief of staff found out what each patient’s career, talent, or area of expertise was and proceeded to barter services for money owed. By his estimation, the chief of staff was certain that he had recouped far more than 10% in services that included everything from dry wallers to electricians to artists. It was a unique approach, but in the end it was not acceptable. It may have brought solutions to lingering maintenance problems that the hospital had avoided fixing, but these solutions did not bring in any revenue. And while the bartering may have avoided expenses further down the line, the results could not help the current financial deficit.
Debt Collection Is a Problem for Companies of All Size
Third party collection agencies offer their services to help companies, both large and small, clear their books of outstanding debt. It might be nice to thing that a detailed and complicated bartering system might help both customers and companies resolve a debt owed, but the fact of the matte is that is rarely the case. It is also the case, however, that most companies cannot continue to carry long standing debts on their books. As a result, the use of an accounts receivable collection agency is increasingly common.
Debt collection services, in fact, are essential to the financial success of many businesses. Many times a company needs to show immediate revenue, and one way for this to happen is for a business to sell its debt to a collection agency. For pennies on the dollar, a debt collection service will purchase a company’s debt and then use their own methods to collect more money than what the debt was purchased for. These collection companies, of course, are able to use a wider range of resources when it comes to collecting these monies.
The latest statistics indicate that in the U.S. alone, the average amount of a medical bill in collections is $579. By purchasing this average amount for just less than $60, a collection company has a wide window of opportunity to collect anywhere from $61 to the full $579 to show a profit. Consumer debt in the U.S. in September of 2018 rose 3.3%, reaching $3.95 trillion. It is no wonder that many companies are looking for a way to find financial relief.
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