Some U.S. hospitals are starting to talk money with patients as soon as they begin discussing treatment.
The reasons are varied, but arguably, one is the new high-deductible policies that force care-seekers to shell out thousands of dollars for medical therapies before insurance coverage kicks in.
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For example, the Henry County Health Center in Iowa gives potential patients an estimate of the cost of treatment at the same time as pre-surgical medical talks begin, according to Reuters
“Most patients are appreciative that we’re telling them up front,” David Muhs, chief financial officer for the Henry County hospital, told the wire service.
There is even a discount if you pay in advance.
Treating patients with insurance, but who don't pay their bills, is one of the unforeseen consequences of some of the implementations of the Affordable Care Act of 2010. The raft of high-deductible policies that satisfy the law often leave patients facing catastrophic deductibles they can't pay.
Interviews conducted by Reuters with dozens of professionals and institutions revealed that many now demand payment ahead of “scheduled care,” or offer zero interest loans.
At issue is the fact that many now choose the lowest payments, which naturally leads to the choice of high-deductible policies. The gamble only pays off if you don't get sick.
Beyond that, President Donald Trump and Republicans are generally supportive of such high-deductible plans, choosing the appearance that this cuts health care spending by making individuals “more responsible” and more responsive to the real costs of care, over the reality – that many put off care until they are sicker and treatment is more expensive, they can't or don't pay their bills, and the hospitals are left with a growing pile of bad debt.
For example, HCA Holdings reported a fourth-quarter bad-debt-to-gross-revenue ratio of 7.5 percent in 2016.
North Carolina-headquartered Novant Health saw this high-deductible trend hitting, and began testing new payment approaches. “To remain financially stable, we had to do something,” said April York, senior director of patient finance at Novant, whose patient default rate dropped to 12 percent from 32 percent after it started offering no interest loans through ClearBalance.
“Patients needed longer to pay. They needed a variety of options,” she said.
How bad is the problem? A recent Kaiser Family Foundation poll found that fully 45 percent of Americans could not pay a sudden $500 medical bill. And the average deductible for the cheapest ACA health plan is $6,000 for an individual, up 18 percent since 2014.