While healthcare costs rose in 2014, revolving credit became less available, diminishing consumers' ability to pay for select medical procedures by more than 11 percent, according to TransUnion's latest Healthcare Report.
TransUnion Healthcare, a subsidiary of the credit and information management company TransUnion, offers providers data, analytics and solutions to increase accuracy and transparency in the revenue cycle. The report includes anonymous data estimates from thousands of providers, including hospitals and healthcare clinics on patient payment responsibilities for commonly administered procedures.
Here are 5 key takeaways from the report.
1. According to the report, TransUnion Healthcare's proprietary ratio comparing available revolving credit to select healthcare costs declined from 15.2 to 1 in the fourth quarter of 2013 to 13.5 to 1 in Q4 2014. This ratio shows that for every $100 in healthcare costs, consumers had access to $1,350 in revolving credit to make those payments in the last quarter of 2014, down from the $1,520 in revolving credit for the same time in 2013.
2. Patients in the subprime risk tier may find affording their healthcare most difficult. According to TransUnion data, subprime consumers' healthcare ratio fell from 4.3 to 1 in Q4 2013 to 3.6 to 1 in Q4 2014.
"Some consumers in the subprime risk category may qualify for a type of charity care, though this is reliant on whether or not hospitals are equipped with the latest technologies to qualify them," said TransUnion Healthcare President Gerry McCarthy. "If hospitals cannot readily provide this charity care, they may end up taking on more bad debt if patients are unable to make payments."
3. Average patient payment costs have increased approximately 11 percent, up from $2,245 in Q4 2013 to $2,491 in Q4 2014. According to the report, the increase is largely attributable to rapidly increasing costs of popular joint replacement procedures, which rose almost 20 percent in the last year.
4. Patient deductible costs also rose last year, increasing 7 percent from $1,062 in Q4 2013 to $1,133 in Q4 2014. According to TransUnion Healthcare, this increase occurred before the government's report that 16.4 million people obtained healthcare coverage during the most recent open enrollment period.
5. According to the report, the average consumer's total revolving credit line on products such as bank-issued credit cards, store credit cards and home equity loans dropped from $34,111 in Q4 2013 to $33,676 in Q4 2014. The drop in revolving credit lines for the subprime population was more pronounced, from $9,705 to $9,006.
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