Engaging Consumers to Win-Win-Win-Win
Healthcare costs are currently lose-lose-lose-lose. High deductibles make it hard for consumers to pay out-of-pocket medical expenses. They lose as they struggle to pay and their credit scores drop when providers shift unpaid balances to collection agencies. Providers lose when they collect pennies on the dollar (recent numbers show about 13 cents). Employers lose because their employees (consumers) are dissatisfied with their health benefits. And payers lose because consumers blame them for high deductibles.
Everyone: consumers, providers, payers and employers, share the same ultimate goal: Access the highest quality healthcare for the lowest cost. Yet when patients have high deductible plans, they have a harder time paying their portion. Many consumers delay or forego treatment altogether. And as more providers rely on these portions for their income, the harder it is for providers to survive. If A=B and B=C, then the higher the deductible, the worse off hospitals and physicians are. Unless we can turn this around to where everyone wins, no one ever will.
Crowe Horwath just released, “Revenue Recognition and High-Deductible Plans: The Greater the Patient Portion, the Lower the Collections,” that basically shows the higher a patient’s out-of-pocket expenses, the lower collections are for hospitals. Crowe Horwath is one of the largest public accounting, consulting and technology firms in the nation. (www.crowehorwathc.com). Crowe studied 800 hospitals and found that “the percentage of collections from patients with balances greater than $5,000 are four times lower than collections from low-deductible plan patients.”
Excerpts from Crowe Horwath Report
The Crowe Horwath report provides some eyebrow-raising numbers (bold type is ours).
“The average payment is 10.9% across all inpatient AR and 18.2% across all outpatient AR.”
Inpatient self-pay after insurance payments as a percent of AR balance vary drastically across segments, exhibited as follows:
- Average self-pay payment is 10.9 percent across all inpatient AR.
- Patient balances below $1,200 exhibit a payment rate of 40.1 percent.
- The payment rate drops significantly – down to 17.6 percent – near the inpatient Medicare deductible amount of $1,201 through $1,450.
- The payment rate for higher-deductible health plans ($1,451 through $5,000) is 25.5 percent.
- The payment rate drops to 10.2 percent for balances $5,001 through $7,500, 4.1 percent for $7,501 through $10,000, and 0.9 percent for accounts with a self-pay balance at more than $10,000.
Outpatient self-pay after insurance payments as a percent of AR balance also vary drastically across segments, exhibited as follows:
- Average self-pay payment is 18.2 percent across all outpatient AR.
- A significant increase exists in the percent of self-pay after insurance outpatient AR residing in the $10,001 through $500,000 segment – from 14.6 percent of AR in 2015 to 29 percent of AR in 2016.
- The outpatient payment rate is 23.7 percent on AR between $1 and $5,000.
- The outpatient payment rate is 4.7 percent on AR between $5,001 and $7,500.
A Solution Exists to Turn the Tide
If you’re feeling as low as your collections at this point, take heart. HealthQRS has developed two cutting-edge software as a service solutions (SAS) unlike anything else in the market that will allow all parties to win. Our Point-of-Service and Retail Medical Marketplace solutions both use sophisticated, complex algorithms to provide true costs – not just estimates – to consumers. Whether you are a provider, payer or employer, you pay a low monthly subscription rate and you start noticing benefits immediately. The consumer sees upfront exactly what his or her out-of-pocket will be and can actually pay the full balance, or setup payment plans before services are rendered. Our system can access account balances in HSAs and assist consumers in utilizing those funds to pay for services. Giving consumers advance information about pricing and improving their ability to pay can increase your census and volume.
Providers benefit by working with payer partners to provide transparency and engagement solutions to the consumer. For example, our Retail Medical Marketplace is an e-commerce platform that allows consumers to type in the service or procedure they need and instantly see a list of procedures along with accurate pricing. If a consumer can shop online for the lowest cost procedure in his or her network and even secure a discount by paying upfront, everyone wins. You can even implement business rules to give discounts for scheduling procedures during times that are normally slow for your staff, facilities and equipment, which helps you effectively manage your inventory. This positions both the provider and payer to be a leader in the marketplace. When word gets out that people are actually saving money on their healthcare, other consumers will want to be part of that group plan.
With HealthQRS, there is no upfront capital expense for our solutions and yet you enjoy immediate financial benefits from collecting patient out-of-pocket expenses immediately. We invite you to schedule a private demonstration of our Point-of-Service solution and / or our Retail Medical Marketplace. The Win-Win-Win-Win solution is here. Be part of the winner’s circle by talking with HealthQRS.
 Crowe Horwath, “Revenue Recognition and High Deductible Plans: The Greater the Patient Portion, the Lower the Collections,” Crowe RCA Benchmarking Quarterly Report, Mar. 2017, https://www.crowehorwath.com/folio-pdf-hidden/Revenue-Recognition-and-High-Deductible-Plans-HC-17512-005A.pdf
 Ibid, p. 2
 Ibid, p. 5