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By Monica E. Oss

January 19, 2010

According to data from the U.S. Substance Abuse and Mental Health Services Administration, approximately 14% of all mental health expenditures are from consumer out-of-pocket spending. Yet, few provider organizations have the ability to estimate a patient’s out-of-pocket expenses, present a bill at the point of service, and collect immediately. Instead, the typical process is to send a bill, often weeks later, and hope that the patient antes up – with little plan to pursue “payment deadbeats” aggressively. Is your organization one of the many that is willing to write off this portion of the market?

Looking ahead, we can expect the proportion of consumer-paid health care to increase: Out-of-pocket health care costs for individuals with employer-sponsored health care insurance increased by 30% between 2001 and 2006; Medicare has long required significant consumer contributions to service costs; Medicaid plans are now appearing that have consumer payment provisions similar to employer-sponsored plans; And, the health insurance options that will be offered by the state health insurance exchanges under health care reform will allow for a wide-range of consumer participation in payment.

The good news in all of this is that while conventional wisdom says that many U.S. consumers can’t—or won’t—pay for health care costs, recent research from McKinsey and Company suggests that consumers are, in fact, willing to pay for services. Still, many of the respondents also said that confusion about payments and the lack of financing options for expenses are major problems when it comes to making payments.

Expect to see a greater proportion of the total health care dollars in “self pay” with more copayments and deductibles in the years ahead – and a mandate by payers to collect these funds. What all of this means is that simply sending a bill and then calling a collection agency can no longer be considered good business practice—for your organization, or for the consumers that you serve. You can read more about the issues of consumer payment in my article, Consumers Can & Will & Must Pay for Services: Mastering the Self-Pay Process is a Necessity for Your Organization .


Monica E. Oss
Chief Executive Officer, OPEN MINDS

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To read more, see: Out-of-Pocket Health Care Costs Up 30% From 2001-2006 for People With Private Insurance all members 

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