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Healthcare Costs, Affordability A Major Challenge for Patients

New research shows consumers cannot afford their healthcare costs and many are skipping care because of the prices, but payment plans can help.

Healthcare costs and patient financial responsibility

Source: Thinkstock

By Jacqueline LaPointe

- According to several new studies, Americans are struggling with rising healthcare costs and paying for their patient financial responsibility, which could spell trouble for providers trying to collect revenue that is owed to them.

Deductibles and healthcare prices are simultaneously on the rise. About four in five workers are enrolled in a plan with a deductible, and the amount they must pay for that deductible before their insurance coverage kicks in is about $1,505 for a single person, the Kaiser Family Foundation reported in 2017.

High deductibles are becoming more common, the research showed. More than one-half of the workers had a deductible greater than $1,000 in 2017 versus one-third of workers in 2012, researchers reported.

While deductibles increase, so are healthcare prices. PwC’s Health Research Institute recently predicted medical costs to rise 6 percent in 2019.

The medical cost trend may be consistent with the 5.5 to 7 percent range of the previous five years, but the six percent hike is still unsustainable, Barbara Gniewek, a Health Services Principal at PwC explained.

READ MORE: Key Ways to Boost Collection of Patient Financial Responsibility

“While some people are relieved that it’s not the high rates of 15 or 20 years ago, costs going up at that rate are still unsustainable,” she recently told RevCycleIntelligence.com. “We still haven’t figured out how to control healthcare costs and we still don’t have the type of healthcare that we need.”

The perfect storm of rising deductibles and healthcare prices may be causing individuals to skip out on medical attention, recent research showed.

Consumers challenged by healthcare costs, skip care

About 22 percent of individuals recently surveyed by Bankrate said that they or a close family member have eschewed healthcare services because of the cost. And the troubling trend is occurring across the insured and uninsured populations.

Just eight percent of total respondents to the Bankrate survey said they did not have insurance, and about three in ten of these individuals avoided seeking medical attention when they needed to.

For individuals with insurance coverage, healthcare costs were still an issue. Almost 17 percent of individuals who said they or their relatives have avoided care were enrolled in Medicare or Medicaid, 29 percent were covered by plans offered by the private market, and 22 percent had employer-sponsored insurance.

READ MORE: Credit Card On File Program Key To Patient Collections Success

A recent Axois report echoed the survey’s findings. The report by Kaiser Family Foundation’s President and CEO Drew Altman showed that 15.5 percent of individuals with insurance either skipped or delayed care in 2017 because of the cost, bringing the total percentage of non-elderly individuals with insurance and affordability challenges to 26.2 percent.

Healthcare costs were especially a problem for individuals in fair or poor health, Altman added. Approximately 46.4 percent of people in fair or poor health were uninsured or had affordability issues despite having healthcare coverage.

Of the individuals with high or rising risk, 13.5 percent were uninsured, and another 32.9 percent had insurance but they or a family member faced difficulties with affording healthcare in 2017.

While many healthcare consumers cannot afford the care that they currently need, even more individuals have failed to save for their long-term healthcare needs.

A recent survey by the Moll Law Group found that healthcare costs are especially an obstacle for individuals needing long-term care. About 70 percent of all patients need long-term care at some point in their lives, with the national average pinning that point at 73 years old, the survey said citing HHS data.

READ MORE: 4 Key Ways to Boost Point-of-Service Patient Collections

But only about 46 percent of individuals aged 18 years or older thought they would need long-term care.

With individuals unaware of their long-term healthcare needs, consumers are failing to save for managing that care. Approximately 64 percent of survey participants have no savings for long-term care and 76 percent said they were not in the financial position to save money for that care.

While patients face unaffordable healthcare costs, providers are left paying the difference. Sixty-eight percent of patients with medical bills of $500 or less did not fully pay their financial responsibility to hospitals in 2016, a TransUnion Healthcare study revealed.

With patient financial responsibility making up 88 percent of hospital revenue by 2017, patients failing to pay their medical bills is significantly impacting providers.

Providers should be implementing collection strategies that help their patients affordable healthcare, such as payment plans.

Implementing payment plans to help patients afford care

Payment plans are a key method for boosting patient collections and helping patients break down their healthcare costs into affordable payments.

Mosaic Life Care in Missouri implemented payment plans through a third-party vendor, which brought in about $5.1 million for the healthcare organization between July and December of 2017.

“The frontend software will look at the patient's ability to pay and it will recommend a number to the caregiver,” Deborah Vancleave, Mosaic Life Care’s Vice President of Revenue Cycle, recently told RevCycleIntelligence.com. “In other words, if the system is coming back and saying the patient owes $500 and the patient could afford $150 a month, then it would spread that out over three or four months.”

The Doctor in California also recently added payment plans to their patient collections strategy. But unlike Mosaic Life Care’s caregiver-focused strategy, the practice’s payment plans could be determined online by the patient, The Doctor’s CEO Max Tselevich explained.

“There's a little sliding bar that you move with your finger to choose what amount of payment you can do today,” he elaborated. “Then, it will automatically split it into either monthly or bimonthly payments until your payment is full. It does it automatically by deducting it from your credit card without giving out that credit card info, of course.”

Using the online-based payment plan strategy, the California practice recouped almost 40 percent of the A/R that was sitting there from about two years prior, and the practice significantly boosted patient satisfaction.

Payment plans will continue to play a vital role at provider organizations as industry experts predict deductibles and healthcare prices to continue rising. Providers will have to work with their patients to manage healthcare affordability issues as patients become a major source of provider revenue.

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