I am sure that this news isn’t a surprise to our health care clients, but according to a recent report released by Trans Union, out-of-pocket costs (average patient payment responsibility) for patients increased more than 38% during the last year. The report suggests that it is likely that these costs will increase even further over the next year.
Average patient payment costs increased from $1,862 in the second quarter of 2012 to $2,568 in the second quarter of 2013. Since the beginning of 2013, patient payment costs have increased more than $500.
At the same time, average consumer’s revolving credit lines have dropped from $34,855 in the second quarter of 2012 to $33,884 in the second quarter of 2013. As a result, consumers have seen their health care purchasing power decrease. In the second quarter of 2012, consumers had $1870 in revolving credit for every $100 in health care cost. In the second quarter of this year, consumers only had $1320 in revolving credit for every $100 in health care costs. The net effect is a 30% decline in the consumer’s health care purchasing power.
We are seeing that more frequently healthcare costs are pushing the consumer to their financial limits, causing them to prioritize which bills to pay first, which quite frequently leads to a default on their health care obligations.
This is why it is increasingly important to have a strong patient collection policy in place. This policy should encompass collecting patient out-of-pocket expenses at the time of service, billing the patient for their responsibility in a timely manner, and sending past due patients to your collection agency. A healthy collection policy will reduce delinquencies, reduce billing costs, and is a smart decision for the health care provider.