As consumers become more aware of medical costs, the hope is that they will take steps to lower their own expenses and put competitive pressure on medical providers. But despite steadily rising payment responsibilities, many consumers aren’t shopping around for lower-priced care options.
Less than 15% of Americans viewed data comparing quality or price information for hospitals and physicians in the past two years, and less than 10% actually used the data, according to the Kaiser Family Foundation. The number is low even after considering factors such as established physician relationships, lack of time due to medical crisis, or language and technology barriers.
Meanwhile, the rise of health plans with high co-pays and deductibles is causing health care providers to depend on patient payments for a higher percentage of their income. Bad debt from insured patients unable to cover their portion of bills is a growing challenge for physicians and hospitals.
Americans tend to get lost in the maze of medical billing practices, and those who try to compare prices often find that estimates from insurers and practitioners do not match the final bill. About one-third of patients have received a surprise medical bill in the past two years, either for a larger-than-expected amount or from a secondary provider they didn’t know was involved, according to a recent study by Consumers Union.
The increased financial responsibility is also causing some patients with high-deductible health plans (HDHPs) to forgo care. One in four fully insured adults in America went without some kind of needed medical care last year because they couldn’t afford it, according to data from Families USA. With annual deductibles of $1,500 or more, patients often skip follow-up care and don’t fill prescriptions, adding to long-term costs and complications. And the problem isn’t limited to plans sold on state exchanges; HDHPs have become a popular option for employers looking to shift costs to employees.
About 23% of insured Americans can only afford health plans that come with high out-of-pocket costs, according to the Commonwealth Fund. With daunting deductibles and co-pays, many of them end up in federally funded community health centers designed for uninsured and Medicaid patients. Despite federal efforts to channel patients to less expensive venues, emergency rooms also continue to see high volumes due to lack of access to primary care or lack of cost-education in newly insured patient populations.
To help resolve patient responsibility challenges, federal and state agencies are calling for greater pricing transparency. Some state exchanges are offering silver-level health plans with reduced co-pays and deductibles. Meanwhile, hospitals with crowded ERs are working to educate newly insured patients and make sure they have access to primary care resources. Hospitals are also exploring new payment and collection standards for HDHP patients.
Industry Impact: Under health reform initiatives, increased patient responsibility puts pressure on medical providers to compete on quality and cost. It also increases patient decision making on whether a treatment is necessary or the best available option. Health care providers, insurers, and manufacturers have the responsibility of ensuring that a patient has access to affordable, high-quality health care services while at the same time maintaining sustainable operational finances.
Anne Law has been a member of the D&B editorial department for more than a decade, providing content for the Hoover’s and First Research products. She currently covers the health care and insurance industries for First Research. For industry news, follow Anne on Twitter.