Too Much Skin in the Game

The average patient financial experience is best described as a complicated mess. 

Whether it’s confusing medical bills sent months after care is received, or unclear expectations around how much something will cost, paying for healthcare from a patient’s perspective is anything but a clean and simple process.

Because believe it or not, patients have more going on in their lives than just receiving healthcare and waiting patiently for their medical bill to arrive so they can pay it as soon as they open the envelope. Life is complicated and stressful for everyone, and the typical patient’s financial experience with their healthcare provider certainly isn’t helping with that.

Over the years, patients are shouldering more and more of the financial burden of healthcare. This transition is championed by some, with the expectation that when a patient has “more skin in the game” (i.e. has a larger financial responsibility for the healthcare they receive), then they will make healthier choices, and will be more judicious with where they go to receive healthcare (i.e. only seek care from more affordable, higher quality healthcare organizations).

While this dream may be realized for some, the overwhelming majority of patients are not better off when they have “more skin in the game.” The primary reason why is because healthcare is governed by massive industries that appear to be focusing more and more on increasing profits, often at the expense of patients. One emblematic effect of this can be seen in healthcare executive salaries compared to healthcare provider salaries, as shown in the graph below.

Additionally, the cost of monthly insurance premiums have consistently outpaced the rise in inflation year over year. One study found that, “over the course of a year, average health insurance spending for a family of four in the U.S. was $25,011 in 2020. This figure includes spending on monthly premiums as well as meeting the deductible.” (2) That’s a lot of money, especially when 53% of American households earn less than $75,000 per year. (3) 

These two statistics side by side is a staggering realization of how roughly a third of household income for more than half of the US is funnelled towards the insatiable appetite of healthcare. And people are suffering as a result. This patient financial crisis is just as real and devastating as the many other crises facing our country today, as evidenced by how 66.5% of all bankruptcies in the U.S. were tied to medical issues (4). When does it stop? 

A recently published summary on the TransUnion Healthcare report found (5):  

• Affordability is the greatest healthcare challenge for approximately 80% of patients, causing 56% of patients to delay paying their medical bills.
• 63% of medical bills were $500 or less and patients failed to pay 68% of those bills completely over two years.
• 14% of hospital medical bills were $3,000 or more and hospitals did not receive full patient financial responsibility for 99 percent of the bills over two years.
• Hospital patient collection rates decrease as patient out-of-pocket costs increase.

With all that said, there is still hope. Patients are desperate for solutions, and they know what works, because they’ve already seen it from other consumer-focused industries. 

A summary of the Trends in Healthcare Payments Annual Report (6, 7) shares keen insights into what healthcare organizations can do to help relieve the crushing financial burden on their patients. Those recommendations are highlighted by these survey responses:

• 81% of patients said they would like to access cost estimates online prior to a medical appointment.
• 71% said they would prefer their healthcare bill to be sent to them electronically (but only 17% percent of patients said they currently receive an electronic bill from their providers).
• 80% of patients said their loyalty to a practice hinges on multiple convenience factors, one of which is bill pay.
• 61% said they would consider switching practices if another clinic offered more convenient methods of paying bills.

These responses show that focusing more on affordability, ease of access and payment, and price transparency tools are how healthcare organizations can help alleviate some of the financial burden on their patients. 

There are a multitude of resources available to those looking to improve the patient financial experience, and if you’d like some ideas on how to do this, we at Wixcorp would be happy to help. 

In conclusion, patients have too much “skin in the game” (literally AND figuratively), and shifting the financial burden even more onto patients is not the answer, as many healthcare organizations can attest. For example, 24% of patient bills were sent to collections, and 67% of providers say that patient collections are their biggest revenue cycle concerns. (8) And while improving the patient financial experience isn’t a panacea to the rising tsunami of healthcare costs, it can stem the tide for individuals and families grappling with how to pay their medical bills.

No matter what role you play in healthcare, you can be a champion for patients by bringing awareness and sharing practical solutions that improve the financial health and wellbeing of those you serve. 

Yes, the patient financial experience is a mess. But together, we can help clean it up.  

Sources:

1. https://healthandwealthbulletin.com/one-chart-that-explains-whats-wrong-with-medicine-today/
2. https://www.thebalance.com/what-is-the-average-health-insurance-premium-4586358
3. https://www.statista.com/statistics/203183/percentage-distribution-of-household-income-in-the-us/
4. https://ajph.aphapublications.org/doi/10.2105/AJPH.2018.304901?eType=EmailBlastContent&eId=a5697b7e-8ffc-4373-b9d2-3eb745d9debb&=&
5. https://www.outsourcestrategies.com/blog/collecting-patient-financial-responsibility-challenges-solutions.html
6. https://patientengagementhit.com/news/health-providers-slipping-on-consumer-experience-patient-payments
7. https://www.instamed.com/white-papers/trends-in-healthcare-payments-annual-report/)
8. https://patientengagementhit.com/news/healthcare-consumerism-patient-empowerment-top-industry-trends