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The Need to Improve Patient Financial Communications
As an increasing number of consumers gain coverage through the health insurance marketplaces, which are dominated by high-deductible insurance plans, the need for providers to have meaningful conversations with patients and their families about out-of-pocket costs for care and service is growing. But many providers find themselves unprepared to have such discussions.
Complex Insurance Details Require More Communication
High-deductible insurance plans were designed to encourage consumers to be more selective in their healthcare choices, ultimately lowering the cost of care. In 2016, the IRS defined a high deductible health plan as a plan with deductibles that exceed $1,300 for single-person coverage and $2,600 for family coverage. In 2016, 83 percent of American workers who enrolled in insurance offered through their employers carried a deductible, according to an employer health benefits survey conducted by the Kaiser Family Foundation/Health Research & Trust. The average deductible for employees has risen significantly over the past 10 years, for individual coverage it totaled $1,478 in 2016, up 12 percent since 2015 and up 49 percent since 2011, according to the survey. But as consumers face higher out-of-pocket costs for care, they become more likely to postpone treatment or service. Two out of five adults with high deductibles have delayed or avoided care based on the amount of out-of-pocket costs, according to a survey by The Commonwealth Fund.
A New Role for Healthcare Providers
In 2006, when HFMA released its landmark report Consumerism in Health Care—a report that presented strategies for collaborating with key healthcare stakeholders to enhance transparency around quality and price, improve the consumer experience, and control rising healthcare costs—discussion of cost-reducing strategies in healthcare was rare. Even today, ten years later, little progress has been made. A recent study observed that during outpatient visits for patients with high cost conditions, the topic of healthcare costs came up in only about 30 percent of visits. However, in those visits where patients broached the topic of healthcare costs, physicians were able to discuss cost reducing strategies 40 percent of the time.
Given that outpatient visits comprise the majority of healthcare encounters, most patients are not having conversations with their providers about the cost of care; yet, if the issue is raised, physicians are fairly often able to explore cost reducing strategies with their patients. In 2007, research conducted by the Patient Friendly Billing project
showed that while healthcare pricing and price transparency were important issues for consumers, cost typically had not been the primary driver of pricing for hospitals, according to the HFMA report Reconstructing Hospital Pricing Systems. Consumer distrust of hospital pricing abounded, and it became clear that all key stakeholders in healthcare needed to work together to develop the principles for a rational pricing system. Today, the desire for improved patient financial communications continues to rank high among consumers and other key stakeholders—including physicians.