High-deductible health plans highlight the need for innovation and why technology solutions to address the patient self-pay market is booming.
The healthcare payment landscape is permanently changing. In 2019, consumer out-of-pocket spending (direct spending for all health care goods and services, including coinsurance, deductibles and any amounts not covered by insurance, and excluding premiums) grew to $406.5 billion, an increase of 4.6% over the previous year. Self-pay accounted for 11% of US healthcare costs. Thus, patients have become the new payers as the rise of high-deductible health plans (HDHP) have left patients shouldering a greater percentage of their medical costs. During the first 3 months of 2018, HDHPs accounted for 47% of all employer-based insurance plans for US adults under 65. Contrast this to 2010 where only about 20% of this population was enrolled in a HDHP. In 2000, patient payments accounted for just 5% of the total healthcare provider revenue; in 2017 it had increased to 35%. Today the patient payment market is projected at $8 billion, and is expected to hit $15 billion by 2027. So, it’s not surprising that higher patient out-of-pocket burden, exploding medical costs and insurance premiums leave patients unable to pay their medical bills. In fact, only 55% of consumer medical debt is currently collected. This translates into the average health system carrying $45 million in bad debt. On top of this, it costs the billing provider four times more to collect payments from patients than from the insurance company.
Consumer dissatisfaction has also increased and is also making national headlines: multiple bills from different service providers for the same encounter, lack of coordination between health insurers and providers, denials of coverage post procedure and often extreme surprise billings only serve to frustrate and alienate patients. Currently patients receive an Explanation of Benefits from their insurance provider and a separate bill from their medical provider. Patients are often confused by these bills and 65% say they would switch to a new provider if the payment experience was easier.
There is no surprise that the emerging patient self-pay market is booming. Patients are becoming more proactive in their search for quality health care that is affordable and provides one-stop easy shopping along with price transparency to help avoid surprise billing. Understanding and budgeting for their health care costs improves customer satisfaction, patient adherence with treatment plans while cutting down on no-show office visits. Providers are also looking for ways attract these new consumers (or accommodate their existing population who are looking for payment alternatives), reduce bad debt, shorten or eliminate payment cycles and reduce payment-related administration costs. A 2017 Black Book report found that 83% of practices were looking to meet the rise in patient consumerism by incorporating more retail-like technology solutions into their practices to better address consumer satisfaction, cost transparency and payment/financing challenges.
Many new technology solutions have emerged to meet this combined consumer-provider need. Success is challenging since the solution must seamlessly integrate with the office’s workflow while providing an easy online customer experience. It’s important to engage a vendor that understands the intricacies of the healthcare system and provides a personalized, secure turn-key service with minimal office disruption.
There will be no going back to “how things used to be” and the new normal has yet to be defined. What is crystal clear is that the “digital front door” in healthcare has been extended to the patient home with the rapid adoption of remote monitoring and telehealth solutions. Patient expectations have been informed by more convenient experiences in retail and hospitality and the ease-of use of online marketplaces. For decades, healthcare has lagged badly in meeting the support system needs of its patients. With the rise of the self-pay patient, looking to the past is no longer an option.
Finding the right online self-pay marketplace can be challenging. It needs to be intuitive to use and easy to understand, present which services are included (and not included), and enable technologies that both patient and provider are familiar with. For the office, the solution must be turnkey, integrate with their existing workflow and, most importantly, seamlessly embed within the practice’s website. The vendor should be your partner, understand the entire healthcare landscape, how to best price your services and have years of clinical and medical office experience. The HealthMe team has encapsulated all the aspects of creating and implementing a successful self-pay marketplace that both patients and providers have embraced. Our flexible turnkey, low-touch, solution allows patients to quickly understand your pre-packaged services and affordable pricing, while fully integrating into your office staff’s workflow.
