News Feature | July 8, 2016

Report Finds More Than Half Of Patients Owe More Than $1,000

Christine Kern

By Christine Kern, contributing writer

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Patients continue to face an increased financial burden due to rising healthcare costs.

Patients face an increased financial burden due to rising healthcare costs and declining revolving credit lines, according to analysis provided by a TransUnion Healthcare Report.

Payment responsibility for medical costs is increasingly shifting from employers to patient, the Healthcare Report found, finding that between 2014 and 2015 patients experienced a 13 percent increase in both deductible and out-of-pocket maximum costs. The average deductible for consumers in 2015 was $1,278 while out-of-pocket costs rose to $3,470. Medical procedures with the highest out-of-pocket costs for patients included: Dermatology ($2,451), Orthopedics ($2,405) and General Surgery ($2,264).

“It’s clear that patients are becoming the new payer — a major source for payments to hospitals at both the time of service and after procedures,” said Jonathan Wiik, principal for revenue cycle management at TransUnion Healthcare. “As hospitals navigate this new era of patient payments, we expect to see them provide more financing options to help patients meet their financial obligations. Healthcare providers also will evaluate resources, such as a patient’s propensity to pay, and engage with patients much earlier regarding financial discussions to ensure the patient is well educated to the cost of their care. This will help the patient keep their focus on getting better versus the worry about paying a large bill.”

With higher healthcare costs, consumers are changing the way they pay their medical bills. More than half (51 percent) of patients in Quarter 1 2016 reported they owed more than $1,000 to their healthcare providers, while 77 percent owe more than $500.

The report also found TransUnion Healthcare’s proprietary ratio comparing available revolving credit to select healthcare declined to 17.2 to 1 in Q1 2016. The ratio means that for every $100 in healthcare costs, consumers had $1,720 in revolving credit to potentially make those payments at the end of March 2016, while in 2015 consumers had $2,250 in revolving credit for medical costs as the ratio stood at 22.5 to 1 in Q1 2015.

“Our findings emphatically demonstrate that despite the advent of the Affordable Care Act, more patients are struggling to pay their healthcare costs,” said Gerry McCarthy, president of TransUnion Healthcare. “In fact, patient payment responsibility continues to rise even as they have less available credit to make their healthcare payments. It’s a precarious position for consumers and healthcare providers alike, but fortunately many hospitals are beginning to implement new technologies that can help alleviate some of these issues now and in the future.”

Wiik added, “Given the increased payment risk to providers and the dilution of available credit, differentiating between a patients’ ability versus willingness to pay will become increasingly important for hospitals. Having processes and tools in place to establish funding mechanisms will benefit the patient and provider.”