As hospitals are providing care to an increasing number of self-pay patients, they're looking for ways to prevent absorbing the cost of caring for that portion of their patient population.
The major contributor to the rise in self-pay patients is the increasing popularity of high-deductible health plans. These plans cause patients to take on more of a financial responsibility for their care, as they still owe a substantial amount even after their insurance is applied.
The use of health insurance exchanges under the Patient Protection and Affordable Care Act is contributing to the rise in the use of HDHPs. Consumers using the exchanges are overwhelmingly selecting bronze and silver tier plans, which both have sizeable deductibles, according to a report from The Advisory Board Company. Therefore, even though hospitals may be seeing more insured patients, many patients still have significant financial obligations for their care.
Not only has the number of people with HDHPs grown, rising from 5 percent of the insured population 10 years ago to more than 20 percent in 2014, but what is considered a high deductible has also changed. Five to 10 years ago $500 to $1,000 would have been considered a high deductible, whereas 81 percent of enrollees in these types of plans had deductibles of more than $2,500 in 2014.
This trend is a major concern for hospital and health systems. "Hospitals historically have had challenges collecting patients' obligations for care, and they're going to have to get better at that," says Zac Stillerman, executive director and general manager of The Advisory Board's Revenue Cycle Solutions, who leads all member service, delivery and product growth opportunities in the firm's revenue cycle terrain.
Putting processes into place to communicate and work with self-pay patients is vital, with nearly three-quarters of companies with more than 1,000 employees offering high-deductible plans linked to health savings accounts or health reimbursement accounts, according to a Towers Watson/National Business Group on Health employer healthcare survey.
There are several steps hospitals can take to handle HDHPs, and here are a few Mr. Stillerman recommends.
1. Work with patients early on. Hospitals need to begin working with patients to fulfill their financial obligations before they receive care. Typically, patients don't receive their bills and begin making payments until 30 to 90 days after receiving care. To survive in a healthcare environment with increasing numbers of self-pay patients this needs to change. "Hospitals have to front load how the patient is going to pay," says Mr. Stillerman.
2. Request a deposit. Since patients with HDHPs owe a lot more than just their insurance co-payments, it is important for hospitals to not only collect patients' co-payments but also attempt to get a deposit ahead of time. Although a very small percentage of hospitals were investing in staff and technology to work with patients to get them to pay as much of their eventual obligation up front five to 10 years ago, that number has grown significantly. Sixty to 70 percent of hospitals were using pre-collection services in 2014.
3. Discuss financial obligations with patients. Hospitals and health systems using aggressive tactics to collect from patients for payment of medical bills does not put forward a good image of healthcare organizations, and it is a source of stress for patients that can often times be avoided. The key is working with patients who have the ability to pay while they are at the hospital. If hospitals communicate with patients and establish a payment plan or some other means of payment before the patient leaves the facility, the likelihood of the bill going to collections is reduced. "Patients are 50 percent less likely to pay their bill after they leave the hospital," says Mr. Stillerman.