Out-of-pocket costs rising even as patients transition to lower cost settings of care
A new TransUnion Healthcare analysis found that most patients likely felt a bigger pinch to their wallets as out-of-pocket costs across all settings of care increased in 2018, said the company in a news release. The new findings were revealed today, June 25, at the 2019 Healthcare Financial Management Association Annual Conference in Orlando.
The analysis reveals that patients experienced annual increases of up to 12 percent in their out-of-pocket responsibilities for inpatient, outpatient and emergency department care in 2018. “For several years patients have faced a greater cost burden as healthcare expenses shifted from payers to patients,” said Dave Wojczynski, president of TransUnion Healthcare, in the statement. “As a result, patients are now making decisions about where they receive care based on costs – not just the quality of care they may receive. This means price transparency is critical for healthcare providers who are not only competing for patients, but also want to secure timely payments from them.”
The TransUnion Healthcare analysis found that, during a hospital visit, patients are likely experiencing cost increases which continues the trend of higher out-of-pocket costs. Approximately 59 percent of patients in 2018 had an average out-of-pocket expense between $501 and $1,000 during a healthcare visit. This was a dramatic increase from 39 percent in 2017. Conversely, the number of patients that had an average out of pocket expense of $500 or below decreased from 49 percent in 2017 to 36 percent in 2018.
As out-of-pocket costs increase, the trend toward consumerism is growing as more patients, payers and providers transition to lower cost settings of care.
An example of this: inpatient care, traditionally the most expensive healthcare option, has seen a leveling off with the percentage of price estimates remaining at 8 percent between 2017 and 2018. The percentage of outpatient services estimates, generally about one-quarter of the cost of inpatient services, rose in that same timeframe from 65 percent to 73 percent.
“Patients are likely seeing more providers and payers recommending that they take advantage of cost-effective healthcare options, which brings down costs for all parties,” said Jonathan Wiik, principal of healthcare strategy at TransUnion Healthcare, in the statement. “This is especially important as costs continue to rise in all areas of healthcare, particularly in inpatient, outpatient and emergency department services.”
As healthcare costs increase across all care settings, it is becoming increasingly difficult for patients to pay their bills. A recent Kaiser Family Foundation study indicated that 34 percent of patients are finding it difficult to pay their deductible before insurance kicks in. In addition to patients being challenged to make payments, many studies indicate providers are also feeling the pressure of increased denial rates and write-offs which is increasing bad debt.
Considering these factors together – increased out of pocket expenses, a patient’s challenge to make payment, and increased denial rates – collecting payments from all payers is critical for providers. In order for providers to ensure they receive payment for the patient-care services rendered, it is vital that they implement strategies that maximize reimbursements by implementing a holistic revenue protection strategy.
To help healthcare providers learn new strategies to prevent denials and find hidden coverage, TransUnion Healthcare will be hosting a webinar on July 11 at 1 p.m. EST. The webinar will feature how a large health system leverages robust solutions for denials prevention, A/R recoveries and insurance coverage discovery to drive maximum reimbursements and improve profitability. Register for the webinar or secure a recording at a later date.
