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:

• The Collections Conundrum all members

• 70% of Hospitals & Health Systems Collect Less Than 30% From Patients at the Point of Service premium members

• Consumers Can & Will & Must Pay for Services: Mastering the Self-Pay Process is a Necessity for Your Organization premium members

• Are You Ready to Write Off 14% of the Market? all members

• Out-of-Pocket Health Care Costs Up 30% From 2001-2006 for People With Private Insurance all members

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."

Sincerely,
Cory W. Thornton
Managing Editor, OPEN MINDS

Back to top

For another free resource, see: I'm Shocked That Looks Really Matter all members 

This is free for the next sixty days to all registered OPEN MINDS Circle members.

Back to top