While lawmakers debate the best path forward for the U.S. healthcare system, millions of Americans need help now as they struggle to pay for necessary medical care.
The immediate solution to this growing crisis lies not in Washington but with healthcare providers across the country that need to follow the lead of consumer giants such as Toyota and Home Depot on how to help people manage big-ticket expenses.
Hold on, you might think: Receiving medical care is not the same as buying a riding lawn mower. That’s true. It is far easier to get zero-interest financing for lawn equipment than to pay an unexpected medical bill.
The growing affordability gap threatens to prove catastrophic not just for patients but for healthcare providers. Here’s why:
Due to high-deductible health plans and other out-of-pocket expenses, patients now represent the third-largest payer group to healthcare organizations behind only Medicare and Medicaid. Yet people cannot afford their increased financial obligations: 68% of adults with medical bills of $500 or less did not pay off the full balance during 2016, up from 49% in 2014, according to a June 2017 TransUnion analysis. That number is expected to climb to 95%--yes, 95%!--by 2020, says TransUnion.
This perilous situation is exacerbated by people who defer or forgo necessary medical services because they can’t afford them. Delaying treatment has shown time and again to increase the eventual cost of care.
Financing medical bills helps both providers and patients
We’ve been working on healthcare financing for years, and we know that the vast majority of patients want to pay their bills. In fact, we collect 89.5% of patient balances in full from all accounts referred to us. What’s equally true is that healthcare providers need patients to pay their bills to keep their doors open.
Yet few providers have taken the critical step that leading consumer companies use routinely to help people manage expenses and increase revenue: Only 18% of 1,011 U.S. adults had any providers speak to them at any time in the past two years about patient financing options, according to the September 2017 HealthFirst Financial Patient Survey conducted by ORC International. Worse, just 8% received no- or low-interest financing from a healthcare provider in the past two years.
It’s time for both providers and patients to adapt to the new payment reality in healthcare. Providers must prioritize efforts to provide accurate and personalized cost estimates to patients, before treatment, so people know ahead of time what they will owe. And providers need to offer ways for patients to fit reasonable payments for care into their family budgets. Going forward, patient care needs to encompass not only clinical but financial health.
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