Patient Spending and Technology

The rise in patient deductibles, coinsurance and copayments has an obvious impact on providers as well.  If they fail to collect those amounts, they are losing revenue and incurring administrative costs in long and complex efforts to collect them.  Deductibles and out-of-pocket maximums are particularly complicating designs.  Copays and even coinsurance are a little easier, and copays were traditionally collected at the time of service.  The complexity of cost-sharing usually means that neither patients nor providers have a good idea at the time of service what proportion of the total costs the consumer must pay.  A survey from research firm BlackBook examines the technological response of providers to this significant issue.   (BlackBook Survey)   The survey included 850 consumers and 1595 doctor practices, 202 hospitals and 49 health systems.  The depth of the problem is indicated by consumers reporting a 29% rise in cost-sharing since 2015, with an average deductible of $1820 and average out-of-pocket costs of $4400.

A good-sized provider has millions of dollars in uncollected, patient-owed bills.  This leads 82% of doctor groups and 92% of hospitals to say they intend to eliminate manual billing and collection processes by the end of 2018 in favor of automated ones.  For small practices under five members, 83% say slow payment by high-deductible patients is their major collection issue, followed by 81% saying being able to tell patients what they owe.  The highest demand features from providers are insurance eligibility verification prior to service, 91%; accurate cost estimation at time of service, 85%; and making payments convenient for patients, 87%.  83% of ambulatory providers said they provided wrong estimates to patients, which is actually up from last years 78%.  Patients are making more payments online, paying 62% of medical bills by that method and 95% of consumers said they would pay that way if given the option.  89% of providers think that most payments will be made with phones and other medical devices by the end of 2018 but only 20% say they are ready for this method.  Good billing and collection operations tend to increase patient satisfaction.

The ideal is a system in which patients can be told the exact amount they will owe at the time of service, maybe even get an estimate before the appointment, but with claim filing and processing lags, computing real-time deductible and out-of-pocket maximum status is pretty much impossible.  And if the amount owed by patients were known, providers could collect at the time of service, eliminating the whole billing and collection process and reducing bad debt, assuming patients have the means to pay.  Technology can help with the process but it can’t give people money they don’t have.