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High Costs Increase Patient Financial Responsibility by 11%

High-deductible health plans, increasing costs, and legislation changes have led to an increase in patient financial responsibility.

patient financial responsibility

Source: Thinkstock

By Sara Heath

- Patient financial responsibility increased by 11 percent in 2017, leading to a major upswing in out-of-pocket patient healthcare costs for the year, according to a recent report from TransUnion Healthcare.

The report, released at the HIMSS18 conference, outlined how patient healthcare costs have changed in the past year as a result of changes in health payer coverage, healthcare legislation, and payment systems.

Patient out-of-pocket costs rose from $1,630 in Q4 2016 to $1,813 in Q4 2017, a total increase of $187. Nearly half of healthcare visits came in at under $500, but a notable portion of visits were more expensive. Thirty-nine percent of healthcare visits cost between $501 and $1,000 and 12 percent of visits cost more than $1,000.

Prices for healthcare specialists are also increasing, the report noted, building on the reputation specialty medicine has for being expensive. Patient financial responsibility for specialty care came in highest for orthopedics ($1,663), plastic surgery ($1,566), urology ($1,415) and neurology ($1,241).

The analysis comes as a part of a TransUnion Healthcare eBook related to patient payments in healthcare. “Healthcare Revolution: The Patient Is The New Payer” outlines the trajectory of patient financial responsibility in healthcare and offers solutions to quelling the problem, according to book author and TransUnion Healthcare financial strategy principal Jonathan Wiik.

READ MORE: Patients Concerned About Financial Responsibility, Health Costs

“Increasing healthcare costs and patient responsibility is a continuing trend that does not seem to be slowing anytime in the near future,” Wiik said. “Given the increased payment responsibility, being able to determine a patients’ ability to pay is increasingly important for hospitals. In order to allow patients to focus on getting the care they need, healthcare providers need processes and tools in place to help patients meet their financial obligations and to establish funding mechanisms that will benefit both the patient and provider.”

Rising out-of-pocket healthcare costs pose a challenge to patient access to care, the report noted. When patients don’t believe they can afford a medical bill, they often go without needed care. In some cases, this can lead to higher healthcare costs down the road as the patient incurs increasingly complex medical issues.

A recent statistic from a 2016 Federal Reserve Economic Report of household income confirms that point, noting that 35 percent of adults would not be able to pay their medical bills if they were to encounter a $400 medical emergency.

A separate report from CarePayment found that with the rise of high-deductible health plans (HDHPs), patients are growing wary of extraordinary healthcare costs that could negatively impact their personal finances. Sixty-four percent of patients have forgone healthcare because they were concerned about healthcare prices, for example.

Of those patients who said they avoided medical care due to cost, 25 percent said they neglected or delayed their follow-up care. Eighteen percent said they avoided a wellness visit with their primary care provider, while 12 percent said they delayed a prescribed treatment or therapy after a surgery or procedure.

READ MORE: High Patient Financial Responsibility Reduces Positive Outcomes

Hypothetically, 44 percent of all surveyed patients said they would not seek care if their out-of-pocket costs reached as high as $500, even if this delay put their health at risk.

Healthcare organizations see their own set of challenges stemming from high patient financial responsibility. When patients cannot pay their bills but still receive healthcare, the organization’s revenue cycle suffers. Organizations are employing some revenue cycle management technology to identify patients with financial barriers and refining patient payment programs.

Patient payment programs, which allow patients to pay their bills at predetermined intervals, allow patients to still receive needed healthcare services while making it more likely that the organization will receive their due payments, according to Tabitha Hickerson, CPC, a billing manager at Family Health Care Medical Group of Modesto.

“As primary care physicians, our number one focus is patient care,” Hickerson said in a previous interview with PatientEngagementHIT.com. “With patient out-of-pockets continuing to grow each year, we wanted our patients to be able to have the peace of mind to make treatment decisions based off of medical necessity and not their finances.”

Creating patient payment plans helped Hickerson and her team deliver healthcare with empathy, a key element to a positive patient experience.

READ MORE: Top Strategies for Collecting Patient Financial Responsibility

“For us, letting patients know that we’re willing to work with them on the balance, it provides a sense of compassion to their health and shows them that it’s not all about the money, as important as that is,” Hickerson noted.

Going forward, healthcare organizations will continue to grapple with high patient financial responsibility and potential difficulty with patient payments. When organizations can create better payment systems and identify patients with financial challenges, they can both preserve their own revenue cycle management and support patient access to care.

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