This article draws on the discussion in Episode 1 of Patient by Design, EpiSoft’s healthcare podcast.
The episode, Making Cents of Financial Consent, is available here – https://youtu.be/PpsNOln0HnI
One of the recurring themes in conversations with Australian hospitals is how complex the financial side of care can be. Not for lack of effort or goodwill, but because the systems and processes that govern informed financial consent (IFC) and pre-payment workflows are not always designed to make these conversations easy, for staff or for patients.
In this article, drawing on the discussion in EpiSode 1 of ‘Patient by Design,’ we explore where the gaps tend to occur, why they are difficult to close after the fact, and what a more robust approach might look like for both private and public hospitals.
Where Does Revenue Leakage Actually Begin?
The short answer is: earlier than finance teams ever see it.
In a typical private hospital inpatient admission, there are three revenue streams to manage: the Medicare component, the private health fund component, and the patient’s own contribution. Of these, the private health fund component tends to generate the most documentation complexity. Health funds require specific paperwork to support a claim, and when that paperwork falls through the gaps, the consequences are felt well downstream from where the issue occurred.
Finance departments are often the ones asked to resolve these issues, but the missed opportunities arose much earlier, at pre-admission, at patient services, at the front desk. By the time finance is involved, “correction” is often no longer possible, and the focus shifts toward “damage control”.
If the claim hasn’t been processed properly, it becomes very difficult to resolve after the fact. The implication is straightforward: the most effective place to address financial consent is before care begins.
The Particular Challenges of Public Hospitals
In public hospitals, the dynamics are different but the exposure is real. While private health insurance use is less prevalent in public settings, it still exists, particularly in hospitals with emergency departments. Patients presenting with private health insurance represent an important funding opportunity for the public hospital, but only if the election process is completed correctly and the appropriate documentation is in place.
For patients without Medicare and without private health insurance, often international visitors, the financial implications can be significant. Procedures can cost several thousands or tens of thousands of dollars. When the financial consent conversation has not happened before discharge, and a patient has returned to their home country, the prospect of recovering those costs becomes significantly more difficult.
Public hospitals are also more sensitive to the timeliness problem. Unlike scheduled private admissions where there may be days or weeks to prepare, public emergency presentations arrive without warning. The infrastructure to have a financial conversation at 2am on a Sunday is simply not the same as during business hours, and that gap can have real consequences.
After Hours, the Problem Compounds
Many public hospitals employ patient liaison staff specifically to manage financial election and consent discussions. These are skilled professionals navigating genuinely sensitive conversations. But patient liaison teams work within human constraints. They are not available at all hours, and patients do not present only during business hours.
When a patient arrives through an emergency department outside of staffed hours, the financial consent process often cannot proceed as it should. This is not a failure of staff; it is a systems and resourcing problem. The result is a pattern of missed documentation, missed elections, and missed revenue that accumulates over time and is often managed retrospectively by finance teams.
Patient liaison staff need to rest. Care, however, continues around the clock. That tension is at the heart of why process design matters so much in this space.
The Patient Experience Dimension
It would be easy to frame this purely as a financial management issue. It is also a patient experience issue.
When financial consent conversations are delayed to the last minute, or bypassed entirely, the consequences for patients can be significant. A patient arriving for a scheduled procedure who has not been informed of their out-of-pocket costs may face a cancelled procedure, or a difficult conversation at an already stressful moment. In more serious cases, families of patients receiving urgent care may be contacted regarding financial matters while their family member is in theatre, simply because the appropriate paperwork was not completed earlier.
The Australian healthcare system operates, rightly, on a principle of care first. The financial conversation is secondary to clinical need. But that does not mean it should be avoided or deferred indefinitely. Handled well, and early, the financial conversation is an act of respect toward the patient. It gives them the information they need to understand their situation and make informed choices. It removes the bill shock that can accompany discharge. It treats the patient as a participant in their own care, not an afterthought.
Patients sit at the centre of hospital care. A well-designed financial consent process reflects that, rather than working against it.
What a Better Process Looks Like
When informed financial consent and pre-payment processes are functioning well, the improvements are felt across multiple dimensions:
For patients: greater transparency, no bill shock, and a more dignified experience from the point of admission.
For clinical staff: fewer interruptions and complications on the day of admission, allowing attention to remain on care.
For finance teams: significantly fewer write-offs, smoother cash flow, and time redirected from chasing unrecoverable debt toward functions that support the hospital’s core mission.
For the hospital overall: more consistent revenue capture that supports the financial health required to sustain quality care. For large hospitals, the difference between a well-managed and a poorly managed IFC process can represent material financial impact, often in the millions annually.
In practical terms, a robust IFC checklist for a scheduled private admission should include: documented informed financial consent, a completed HC21 (the Australian standard form authorising the hospital to claim health fund benefits directly), a fee estimate provided to the patient well in advance of admission, and ideally a pre-payment of the known patient contribution before the day of the procedure. This removes one of the most common points of friction on admission day and allows the conversation to shift from financial logistics to patient care.
For public hospitals with emergency departments, the focus is different: a 24/7 process capable of identifying and documenting private health fund elections and overseas patient status at any hour, supported by technology where staffing alone cannot fill the gap.
A Final Observation
The hospitals navigating these challenges are not doing so because of indifference. The teams working in admissions, patient services, and finance are, in the overwhelming majority of cases, doing their best within systems that were not always designed with this specific challenge in mind.
The opportunity is in the design of those systems. Getting financial consent right is not about adding burden to already stretched teams. It is about building processes that make the right thing the easy thing, for staff and for patients, at any hour, in any presentation context.
That is a solvable problem, and one worth addressing.
