Middle-Class Squeezed Under Rising Healthcare Costs
Written by Robert Miller
While Medicaid provides healthcare subsidies for low-income households and the rich can afford healthcare, it’s the middle-class who are squeezed by rising healthcare costs.
According to a June 2016 Brookings’ analysis for The Wall Street Journal, healthcare spending by middle-income households was 25% higher in 2014 than in 2007.
A large part of soaring healthcare spending by consumers is due to rising deductibles. The Kaiser Family Foundation found deductibles for individual workers have skyrocketed 67% since 2010. Another Kaiser analysis of tens of millions of insurance claims showed patient responsibility rose by 77% between 2004 and 2014. That huge jump was driven by a staggering 256% rise in deductible payments. Even the insured are having problems paying their medical bills.
Middle-income families may be forced to choose what medical needs are top priority and skip or delay those that aren’t. An infoedge 2015 Healthcare Consumer Payments survey of 1810 people revealed that 18% of consumers delayed treatment at least once due to their inability to pay required upfront costs. On more than one occasion, 21% of the consumers delayed care due to out-of-pocket costs. However, when considering only the middle-class, delaying care on multiple or single instances, this percentage changes to 17% and 27% respectively. These changes are most likely due to the fact that more than 50% of middle-class workers have high or medium deductible plans: Medium or high deductible plans refer to deductibles greater than $1,000 for individuals and greater than $2,500 for families.
In 2015, according to Pew Research Center, middle-income households make up 50% of the U.S. adult population. These households are the ones most likely to feel squeezed on high deductibles. Also, they’re likely a significant portion of your patient population, so their ability to pay their medical bills greatly affects your company’s financial health.
Assess your payment capabilities
Healthcare providers must alter their approach to payments. Evaluate the payment options available to your patients including channels, tender types accepted and the security of payments. To build strong partnerships with your patients, you need to have a clear understanding of their needs. Use experiential data to learn about your patient preferences and their expectations regarding medical payments.
Armed with that information, you can bridge the gap between current payment inefficiencies and optimal payment capabilities. Transform your payment capabilities by applying key aspects of process, people, structure and technology to them.
Streamline your operations policies and back-office efficiencies
A savvy approach to operations is to combine your patient needs with your operational efficiency goals. Analyze the operational and logistical flow of your practice.
Are your policies designed to guide your patients down the most appropriate and efficient pathway? Have you created back-office procedures so all patient payments are captured and recorded appropriately? Have you installed safeguards to guarantee that no patient is left with unanswered questions?
Intelligent design of your support systems can be your strongest ally in maintaining and improving high patient satisfaction levels.
Give your patients financial assistance
America’s middle-class has taken on a significant burden for healthcare payments in recent years. In most cases, they have to plan each medical expense and can truly benefit from some flexibility on your end. Consider implementing a patient financial assistance component in your practice to minimize surprise expenses, allow your patients to pay in installments and eliminate circumstances where patients are delaying or foregoing care due to financial constraints. The infoedge 2015 Healthcare Consumer Payments survey reports that 55% of middle-class patients would like an estimate of out-of-pocket costs. The estimate would significantly increase their ability to pay at the time of service. Additionally, 52% of those patients rank payment flexibility or pre-care estimates as the first or second most important resource from the healthcare provider.
Leverage technology to provide a personalized service and reduce costs. The same survey indicated that up to 67% of middle-income patients prefer email notifications over receiving information in the mail. Consider using alternate email communication or setting up an online help portal to provide immediate answers to your patients’ inquiries outside of your office hours and front desk staff.
Improve your company’s profitability by offering patients flexible payment plans that can smooth their financial burden. Contact infoedge today for a complimentary consultation to evaluate your company’s healthcare consumer payment solutions.