More US hospitals pushing patients to pay before care
WASHINGTON, April 13, (RTRS): Last year, the Henry County Health Center in Iowa started providing patients with a cost estimate along with pre-surgery medical advice.
The 25-bed rural hospital in the southwest corner of the state implemented the protocol because of mounting unpaid bills from insured patients, a group that had previously not raised red flags.
Henry County is one of hundreds of US hospitals trying to cope with an unexpected consequence of the Affordable Care Act of 2010, known as Obamacare: millions more Americans have health insurance, but it requires them to spend thousands of dollars before their insurer kicks in a dime.
Since US hospitals do not want to end up footing the bill, they are now experimenting with pre-payment strategies for patients, with a growing number requiring payment before scheduled care and offering no interest loans, according to interviews with more than two dozen hospitals, doctors, patients, lenders and healthcare experts.
“Most patients are appreciative that we’re telling them up front,” said David Muhs, chief financial officer for the Henry County hospital, which provides a discount for early payment. The discussion leads some patients to skip care, others to delay it or use a no interest loans available through the hospital, he said.
The ACA extended insurance to 20 million Americans, which initially helped hospitals begin to shrink debt from uninsured patients who could not pay their medical bills. But more and more, people in Obamacare plans or in employerbased health plans are choosing insurance that features low monthly payments. The trade-off is high out of pocket costs when they need care.
If President Donald Trump dismantles Obamacare as promised, these plans won’t disappear. Republicans also believe high-deductible plans curb spending, and Americans faced with medical costs that rise faster than inflation and wages will look for premiums they can afford.
The trend is expected to accelerate this year because unpaid bills are creating massive bad debt for even the most prestigious medical centers. US hospitals had nearly $36 billion in uncompensated care costs in 2015, according to the industry’s largest trade group, a figure that is largely made up of unpaid patient bills.
The largest publicly-traded hospital chain, HCA Holdings Inc , reported in the fourth quarter of 2016 that its ratio of bad debt to gross revenues of more than $11 billion was 7.5 percent.
One of the first to test this new payment strategy was Novant Health, headquartered in North Carolina with 14 medical centers and hundreds of outpatient and physician facilities. It saw patient debt increase when more local employers started adopting high deductible plans, including one that made its executives pay $10,000 in out-of-pocket expenses.