Saturday, May 19, 2012
Direct Consumer Payment 13% & Rising
The last mega-study of U.S. health care spending found that 13% of total spending was paid directly by consumers – a combination of payments by uninsured consumer and consumer coinsurance, copayments, and deductibles (see
U.S. Health Care Spending Hit $2 Trillion In 2005; Your Marketing Objective Is To Get Your Share premium members and
The New Health Care Market: Consumers Spend More & Consumers Want More premium members) . And a new report – Trends in Healthcare Payments Annual Report: 2011 – by InstaMed shows that the proportion of health care costs paid by consumers may be even higher, and on the rise. The survey (based on nationwide qualitative data obtained from health care provider organizations
of all sizes) found that consumers were responsible for 26% of charges in 2011.
This increase in consumer payment has some specific management implications for service provider organizations. Collecting on consumer debt is of growing importance to the financial sustainability of service provider organizations. Optimizing your collections policies and procedures is a key area for most organizations – and will be even more so in the future. To that end, check out these great resources in our Industry Library:
Where is the field in addressing the rising consumer contributions to health services? In 2011:
82% of provider organizations had a process for collecting patient payments at point of service. Of those who didn’t, 30% didn't know patient responsibility.
45% of provider organizations said they did not know patient responsibility during the patient visit.
81% of provider organizations took more than one month to collect from a patient.
The takeaway is clear – if provider organizations don't know what the consumer owes, the consumer won't be prepared to pay for the service. And beware, not having a thoughtful process with ample communication to consumers is a risk, or you may end up in the news like this – see
Embattled Hospital Debt Collector Taps Politicians For Defense and
Accretive Health Debt Collector Defends Embedding Employees Inside Hospitals. Consumer responsibility is a growing challenge for provider organizations – and an opportunity to differentiate your organization as "consumer friendly."
Cory W. Thornton
Managing Editor, OPEN MINDS
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