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Escrow: a healthy alternative.

Looking at the wide array of possibilities for escrow accounts can be like reading the menu at a deli: There's something for everyone.

By definition, an escrow is an account set up between two parties -- buyer and seller -- to be administered by a third party, usually an agent from a bank's escrow department. Whether you're purchasing land, an airplane, a car or a piece of heavy equipment, an escrow account is an excellent way to handle the money transaction. It's also one of the best methods of transferring liquor or fishing licenses or taxi permits or of making child support or alimony payments.

Escrow accounts for these types of transactions are fairly common. But good escrow agents, being the creative crew that they are, look beyond the common uses to find fresh ideas -- new ways of making customers' lives easier. One program developed for operation through escrow accounts is proving helpful to many health professionals around the state. It's an escrow account that gives patients -- and health care providers -- an option in making payments.

Everywhere in the health industry there's a financial crisis these days, and here in Alaska the situation's particularly severe. Many who have insurance are finding their deductible costs steadily rising. The number of things insurance companies cover has been cut back, and those expenses still covered have been scaled down. All in all, it's become harder than before for some patients to meet their medical or dental bills. These patients need an alternative.

At the same time, collecting reimbursement fees can be as difficult for health professionals as paying bills can be for patients. Offices routinely are running with the barest minimum staff possible to cut expenses and meet the necessary budget constraints. Each member of the staff is stretched to handle tasks that were someone else's, and they're overwhelmed by the work that existing procedures require.

Billing systems generally aren't geared for installment payments, and keeping track of partial payments erodes staff time. It isn't uncommon today to find an office that hasn't done anything about its collections for 90 days or more. These offices need a new system to help them cope.

Enter escrow. Escrow has many options that make it easier for patients to settle their bills. In addition to paying their accounts in full or face being turned over to a collection agency, patients now have a third option: They can make partial payments on a time plan through escrow accounts.

Under this new system, the patients make their payments to the escrow agent, who deposits the funds directly into the account of the appropriate doctor, dentist or health agency. The agent generates a receipt to the patient and a report to the client. As a result, the agencies have more time to do what they do best -- provide health care to their patients. It's teamwork -- and it works.

Another benefit from this type of payment system is that those doctors and dentists offering more cosmetic-type treatments not usually covered by insurance have a method to let patients make partial payments on elective procedures. The patients who seek this type of treatment can work out a payment schedule to make regular payments up front before the treatments, or to make a down payment to the doctor and monthly installments after the treatment. This method benefits both the doctor or dentist, who may otherwise have lost the business, and the patient who, without a time-payment plan, wouldn't have been able to afford the bill.

Not all financial institutions offer escrow services, and those that do vary greatly in the services they offer. If you're looking to open an escrow account, invest a little of your time in investigating what organization offers the services you want. Find out whether or not each considers its escrow services only an extension of its general loan services. Escrows, after all, are unique. And they require the attention of qualified escrow experts -- experts who can work closely and creatively with you to meet your special needs and goals.

Carol Fulkerson is a senior escrow officer with the First National Bank of Anchorage.
COPYRIGHT 1993 Alaska Business Publishing Company, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Title Annotation:escrow accounts for health care services
Author:Fulkerson, Carol
Publication:Alaska Business Monthly
Date:Jul 1, 1993
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