For the last several years, ASCs — like nearly all healthcare providers — have witnessed firsthand a growing shift in the responsibility for payment of services from payers to consumers. This has created numerous obstacles for the delivery of surgical services, including the ability for patients to cover their expenses and surgery centers to collect what is owed to them for performing procedures.
An analysis of data concerning patient financial responsibility helps paint a clearer picture of the challenges facing patients and ASCs and why the ability for surgery centers to offer flexible financial solutions is quickly becoming as important as it once was to embrace accepting credit cards. Here are five key takeaways, with statistics to support them.
1. There's been a substantial increase in patient responsibility.
We know patient financial responsibility is on the rise. But how much has it changed in recent years?
Turns out it's quite a lot. The average out-of-pocket costs for patients increased 11% during 2017, rising from $1,630 in the fourth quarter of 2016 to $1,813 in the fourth quarter of 2017, according to TransUnion Healthcare. The average annual premium for employer-sponsored family health coverage reached nearly $19,000 in 2017, up 3% from 2016, according to Kaiser Family Foundation (KFF). And the average annual deductible for single coverage in 2017 was more than $1,200, up from about $30 in 2006, according to KFF.
2. Surgery expenses have surged.
As most ASCs noticed, the cost of surgical care has soared over the past few years. And the data backs this up. From 2012 to 2016, outpatient surgery prices increased 19%, reaching an average cost per surgery of more than $4,700, according Health Care Cost Institute (HCCI).
In the fourth quarter of 2017, orthopedic procedures had the highest estimated out-of-pocket cost for all medical specialties, coming in at about $1,660, according to TransUnion Healthcare. The out-of-pocket cost estimates for other high-dollar specialties include plastic surgery (~$1,570), urology (~$1,420) and neurology (~$1,240).
3. Patients are increasingly focused on cost.
The price associated with receiving medical treatment is weighing heavily on patients. That's motivated, in part, by the fact that 40% of adults cannot cover a $400 emergency expense, according to the Federal Reserve. Nine of out of 10 consumers want to know their payment responsibility upfront and 65% of consumers indicate they would consider switching healthcare providers for a better payment experience, according to InstaMed.
4. Providers are struggling to address patient needs.
Despite the growing demand from patients for more information about their medical care expenses, providers are coming up short in meeting these needs. Thirty-six percent of providers say they never discuss a patient's ability to pay for healthcare prior to delivering services, while just 23% of providers strive to always discuss each patient's ability to afford treatment prior to delivering services, according to West Corp. Furthermore, West Corp. data indicates that 3 out of 4 patients say they do not know the cost of their healthcare services until they receive a bill.
This lack of knowledge is having a significant impact on patients' lives. Fifty-five percent of patients say they receive medical bills they thought were covered by insurance or where the amount they owed was higher than expected, according to NORC at the University of Chicago.
The knowledge patients receive isn't always helpful, as 30% delay medical payments because of confusion over what expenses were covered by insurance and what they owe, according to West Corp.
5. Patients are experiencing significant, negative effects on their health and financial wellbeing.
This may be the most significant takeaway. The increase in patient financial responsibility is harming patients. NORC at the University of Chicago states that 40% of people skip necessary medical tests or treatment due to costs and 28% of patients had a medical bill turned over to a collection agency. Thirty-seven percent of consumers have unpaid debt from medical bills, according to the Federal Reserve.
Unfortunately, patients have a pessimistic outlook, with 89% of consumers fearful that the rising cost of healthcare will adversely impact them in the future, according to The Physicians Foundation.
Take the lead on patient support
The data supports what we in the ASC industry have heard about and seen for years: Patient financial responsibility is on the rise and shows no signs of slowing down. In the interest of maintaining high patient satisfaction and collecting what patients owe for their surgical care, ASCs must help educate patients on what they owe for treatment in advance of receiving care (at least providing an estimate) and why they owe this amount, if questions are asked.
Surgery centers should also be prepared to help patients cover their financial responsibility, including offering payments plans or flexible financial solutions such as a secured loan to cover surgical costs. Doing so can better ensure patients elect to receive their surgical care and pay for it in a manner that effectively fits their budget. Through such offerings, ASCs will achieve their mission of delivering high-quality care to patients and capture the money necessary to maintain a successful business.
Randy Bishop (rbishop@surgicalfunds.com) is a partner with Surgical Funds, which facilitates patient financing solutions to supplement out-of-pocket expenses for ASC procedures.