Submitted on Wed, 2014-08-06
By Alex Thibodeau

Regardless of your decision, your local health department should implement a billing program to receive reimbursements from private and public payers.

Should Local Health Departments Compete With Private Doctors and Hospitals?

To compete or not to compete? That is the big money question permeating through local health departments at the moment. Is it worth it for your department to continue providing services to newly insured people that could now afford to go see a physician for treatment and preventative medical needs? With more and more retailers like Walgreens and Target providing immunizations, should it still be a priority for local health departments? Continuing to provide services to these patients could be seen as a potentially distracting from those truly in need. It doesn’t have to be though.

Whether your decision is to compete or not compete, the benefit of having a billing program is that it’ll financially support the programs you’ve decided to focus on. If you decided not to compete and focus on people who are underserved, the funding could help close the budget shortfalls from government funding.  Starting a billing program to collect reimbursements from those with insurance will enable you to help those that truly cannot afford services by creating more funding for your department. With sustainable revenue, you can support, expand, or start other programs. You’re already providing the services, so it makes sense to collect as much revenue as you can.


Billing Creates Your Own Funding

Local health departments have seen large funding cuts over the past few years, making creating sustainable revenue vital to keep your department thriving. The Affordable Care Act was successful at increasing the number of insured patients in the U.S. With more and more patients covered by insurance, it increases the likelihood that private practices will not be able to handle such high volumes. More patients for local health departments means more funding/revenue is necessary to treat them all.

Local health departments need to be prepared by contracting and credentialing with insurance companies to receive reimbursements for services rendered. You’ll miss 100% of every dollar you don’t try billing for. Even billing out-of-network insurance companies can result in reimbursements. Earning revenue through reimbursements from private and public insurance plans ensures that local health departments will be able to continue providing the essential services to improve the health of your community.


It’s a Complementary Environment, Not Competitive

All healthcare providers, private or public, are ultimately working towards the same goal. Everybody wants to improve the health of their community. Working as as complements as one another will keep the community healthy and safe.

Local health departments and private practices see patients with considerably different demographics. While private practices and hospital will see more insured patients, local health departments are more likely to treat the uninsured or patients with Medicaid (which your department can be reimbursed for). Local health departments also tend to put a much larger focus on preventative services, while hospital and private clinics focus on treatment.

Some private practices even avoid preventative programs like Vaccines for Children (VFC) because of stringent regulations. Options aren’t necessarily expanding for the newly insured, so there’s a good chance they’ll still come to your local health department for care.

The opportunity to collect revenue from private and public insurance plans is not going to slip away from local health departments any time soon. The long-term health of your health center depends on being able to successfully collect payments from those with the means to pay to help subsidize losses from those that cannot.


Get a free healthcare revenue performance evaluation from our public health experts today to learn more. Our consultants and SMART Health Claims Management solutions helps local health departments and community health centers generate 35-70% more sustainable revenue within a month. More than 100 departments have signed up for SMART Health Claims Suite so far this year, and each one is seeing dramatically increased revenue.

About the Author

Healthcare Analyst and Detroit native, Alex Thibodeau, is commited to Chicago's youth initiatives. Before joining the SMART Health Claims team, Alex worked as the lead Journalism instructor for the Midtown Educational Foundation. You can contact Alex at

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