The Impact of High-Deductible and Self-Pay Patients on Your Practice

Posted by Continuum on Dec 5, 2014 9:30:00 AM

Patient_at_front_desk_iStock_000025852725Large

The Rise of High-Deductible Health Plans

As more Americans move into public and private health exchanges or choose employer-sponsored high-deductible health plans, the shift in financial responsibility has created new challenges for physician practices.

According to the American’s Health Insurance Plans (AHIP) Center for Policy & Research, an additional 2 million people joined the ranks of those with coverage under a high-deductible health plan (HDHP) in 2014. Today, more than 17 million people are now responsible for thousands of dollars in out-of-pocket healthcare expenses, as shown in Figure 1.  In 2015, an individual could be liable for up to $6,450 in out-of-pocket costs, and a family’s out of pocket maximum could reach $12,900.

 

Growth_of_HSA-Qualified_High_Deductible_Health_Plan_Enrollment

 

 

 

 

 

 

 

 

 

 

As the deductible increases, patients often fall short of meeting their financial obligation as demonstrated in Figure 2.

Figure 2: Increasing deductible thresholds

Deductible

% Meeting deductible

$2,500

11%

$5,000

4%

$7,500

3%

$10,000

2%

Source: eHealthInsurance

 

Faced with the financial burden of full cost healthcare services, a rising number of patients are also forgoing care in order to save money. By avoiding treatment, patients are risking long-term health issues and potentially contributing to the overall cost of care – an unintended consequence of insurance reform under the Affordable Care Act.

What Does This Mean to Providers?

The rise of self-pay and high-deductible patients has both clinical and financial implications for practices.  According to a study from the Employee Benefit Research Institute, people in high-deductible health plans cut spending by avoiding even lower-cost generic drugs prescribed for chronic conditions. In addition, these plans cause patients to rethink visits to the emergency room for less serious events, but have resulted in men avoiding the emergency room for potentially serious issues, such as an irregular heartbeat, as shown in Figure 3 below. All of these decision triggers can affect health outcomes, a key area of quality metrics upon which physicians are judged in value-based payor contracts.  Consequently, providers must identify these patients within the practice and proactively manage their care to prevent acute care episodes. 

Figure 3

Pay_More_Seek_Less_Care_Diagram_from_Medical_Care_2013

On the financial front, practices are more susceptible to "bad debt" associated with self-pay or high-deductible plan patients. Providers must now collect higher payments directly from the consumer, not the insurer. Both hospitals and physician groups report a higher percentage of patients unable to meet high deductible or self-pay obligations, shifting the cost burden -- and eventual bad debt --  to providers. Today more than ever, practices must understand and calculate patient obligations, consider improved point of service payment options and back office processing methodologies as a first step toward improving collections.

Learn more about improving collections for your practice by downloading our FREE Healthy Revenue Checklist.

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To discuss how Continuum can improve your revenue cycle performance, please contact: Devon Swanson, (856) 782-3300 ext. 2419 or deswanson@challc.net

 

 

Topics: Insurance, Health Plan Enrollment, Self-Pay, High-Deductibles

   

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