The rise of cost-sharing leaves consumers wondering what they will owe when they see a doctor. Most want to understand what their obligation will be.
Every year, PwC Health Research releases an annual report on top issues facing healthcare for the upcoming year, and the 2017 report forecasts “a year of uncertainty and opportunity” ahead for the industry. Despite this outlook, there is a trend that all healthcare organizations can be sure will hold true this year and beyond—consumers are a key stakeholder and driving change in the industry.
Rising enrollment in high-deductible health plans (HDHP) has been a major factor in consumer payment responsibility, as consumers must meet a deductible before their health plan covers any portion of the services. Yet, HDHPs are only part of the story as consumer cost-sharing translates into out-of-pocket costs, such as deductibles, copayments and coinsurance. Indeed, the amount a consumer must pay before a health plan pays any portion has increased by 255% since 2006, according to the Kaiser Family Foundation.
This increased responsibility has changed how consumers approach visits to providers. Consumers want to know upfront how much they will owe and then understand how to make payments. Questions like, “How much is this going to cost?” and “What are my payment options?” have become common in healthcare settings for consumers.
Despite their new role in healthcare, consumers often leave their provider visit without any expectation that they will receive a bill or a discussion about how to make a payment. Therefore, it should come as no surprise that McKinsey and Company reports providers can expect to collect only 50% to 70% of a patient balance after a visit.
This happens even though consumers want to know what their financial responsibility will be. In fact, 9 in 10 consumers reported that it was important to know payment responsibility prior to a provider visit (LHK Partners Consumer Survey 2016). This goes beyond providers making their retail pricing available. There’s a need for consumers to have an estimate of their precise out-of-pocket obligation based on their benefit information. By making it simple for consumers to understand what a service will cost, healthcare organizations can set payment expectations and then offer multiple payment options upfront—leading to a faster payment.
The healthcare industry can look to standard practices from other industries to guarantee revenue, while making it simple for patients to pay what they owe. Just like reserving a hotel room, providers can require that all patients present a payment method before the time of service to ensure the responsibility is automatically paid with low staff intervention. Patients are familiar with this process from their experiences in other industries and often prefer automated, simple payments. To further streamline healthcare payments for consumers, providers can easily allow patients to pay online or through a website where they are already accustomed to visiting and paying bills.