Managing Your Practice

High Deductible Health Plans: Take Accounts Receivable Action Now

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If you missed the recent headlines, Why Patients Delay Medical Payments: 12 findings 1 and You think your health insurance costs too much. Try being a farmer.2, you may not be too worried about your ever-rising accounts receivables. But you should be.

The facts in these stories and the 2017 Employer Health Benefits Survey,3 released on September 19 by the non-partisan Kaiser Family Foundation and Health Research & Educational Trust (HRET), are alarming. Let’s look at some of the survey results.

Since 2007, the average family premium has increased 55% and the average worker contribution toward the premium has increased 74%.3 How does that translate into dollars and cents? Well, the average annual premiums this year are $6690 for single coverage and $18,764 for family coverage.

What does that mean exactly to the farm couple in the Crain’s story? The farmer who “will be lucky to net $75,000” on his hay crop this year has a policy premium with Blue Cross Blue Shield of Illinois that was $22,000 last year. And then there is a $5000 deductible for each him and his wife. Do the math: it means they’d spend 43% of their income before health insurance covers anything.

Do premiums vary significantly by firm size or region? Should surgeons in certain areas of the country be less concerned about these trends? No, the premiums don’t significantly vary by size or region.

The point here is not to write an essay about health insurance premiums, but rather to discuss what this economic reality means to patients who are seeing you tomorrow, next week, and next month. Given these economic realities, what is their attitude about your bill?

For insight, let’s look at an Advisory Board Company brief, “Minimizing Bad Debt: Point-of-Service Collections,”4 which states: “Patient propensity to pay decreases as patient obligation increases.” According to the brief, “Our analysis indicates that as the dollar value of a patient’s obligation increases, their propensity to pay any portion of the obligation decreases—for all patients, at all income levels.” See Figure 1.

Figure 1.

Given that market statistics show that more than a quarter of the commercially insured patients are covered by high deductible health plans (HDHPs), your practice must adapt to these changing times.

Review Your Pay or Mix

Smart practice administrators will keep their finger on the pulse of the insurance local market as more employers move toward offering HDHPs or health savings accounts. Knowing what the largest manufacturers are offering, along with local hospitals that are typically sizable employers in most communities, is critical. The coverage for school systems, police departments, fire departments, and governments should also be the practice radar.

A recent West Corporation survey5 reveals more about the demographic profile of patients who are less likely to pay or delay payments. Their study shows that 79% of patients cite affordability as the largest healthcare problem with 93% of patients saying it costs too much. So it should be no surprise that 67% say their financial situation makes it challenging to submit timely payments. If you are not familiar with the company name, you’ll be familiar with West Corporation’s products, like Televox, which are automated tools used by practices to remind patients about appointments and copays.

Here are other relevant findings from the West Corporation survey:

  • 56% delay payments of medical bills at least some of the time.
  • 70% of millennials have missed medical payment deadlines.
  • 42% of patients cite their HDHP as the reason for delaying their payments.
  • 36% of patients said they have difficulty remembering to make timely medical payments.
Figure 2.
What West Corporation reported about the 23% of providers who habitually talk about patient’s ability before delivering services is similar to the Medscape Orthopedist Compensation survey report of April 1, 2016 (Figure 2).6

It’s no surprise that orthopedic surgeons are not discussing fees with patients. Although only 9% admitted that they don’t discuss costs with patients, it is safe to estimate that few surgeons have their fee schedules memorized.

In a 2013 article, Ubel and colleagues7 said, “Because treatments can be ‘financially toxic,’ physicians need to disclose the financial consequences of treatment alternatives just as they inform patients about treatments’ side effects.”

While uniquely qualified to discuss treatment options, few orthopedic surgeons have the time or the facts to personally discuss fees, out-of-pocket expenses, uncovered services and payment plans. Detailed discussions about patients’ financial liabilities are better done by qualified staff, who verify benefits and use modern technology tools to generate an electronic “estimate of costs and benefits.”

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