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Healthcare Providers Adapt as High-Deductible Health Plans Become More Prevalent

Medical staff meeting

Healthcare Providers Adapt as High-Deductible Health Plans Become More Prevalent


If your employer didn’t offer a high-deductible health plan (HDHP) in years past, chances are they’re offering one now. As healthcare costs continue to rise, more and more employers are offering HDHPs. In 2018, annual premiums for employer-sponsored family health coverage reached $19,616, with workers paying an average of $5,547 toward the cost of their coverage, according to the Henry J Kaiser Family Foundation’s 2018 Employer Benefits Survey.

Healthcare facilities are feeling the effects of HDHPs as a greater percentage of the patient population is paying more of their medical expense out of pocket. Most notably, a greater portion of facilities’ revenue comes from self-pays. This shift greatly affects providers because of the increased possibility that a patient with a HDHP could have inadequate funds to pay a costly medical bill. A trip to the hospital could result in a bill costing thousands of dollars. Patients who struggle to pay high deductibles translates directly into longer revenue cycles for healthcare facilities, and if those patients go to collections the revenue cycle may take even longer and potentially lead to increased bad debt.

It’s no surprise that more and more patients are requesting payment plans to pay off large medical bills. Even smaller facilities are managing payment plans for potentially thousands of patients, which isn’t an easy task. Managing patient payment plans can require a lot of manual work on facility staff, potentially creating the need for additional employees.

The prevalence of HDHPs is also creating an increased demand for transparency in healthcare costs. Now that patients are strapped with higher costs, they are asking for more insight into healthcare expenses. According to a 2017 Health Affairs study, U.S. consumers with deductibles of $2,501 or higher were more likely to compare prices among providers.

Asking how much something will cost may seem simple enough, but those of you in healthcare know it’s not always an easy question to answer. How much a medical procedure will cost depends on a variety of factors that aren’t always easy to determine. As patients begin “shopping” for healthcare, some providers are adapting by setting out-of-pocket costs and providing pricing up front. For example, Baylor Scott & White Health in Texas calls patients to provide cost estimates for more expensive hospital services, in addition to providing walk-in and emergency room patients an estimate.

HDHPs show no signs of slowing down but healthcare facilities are making changes to adapt to longer revenue cycles. One change is an increased focus on patient education with the idea that educated patients will make smart healthcare decisions. For example, helping patients understand when they should visit their primary healthcare provider versus going to an urgent care or hospital could result in significant cost savings. Additionally, it’s important to educate patients with HDHPs why they shouldn’t forego medical care when they need it because it may lead to higher costs down the road.

The healthcare industry has also adapted to HDHPs by offering Direct Primary Care services, which is a member-based model of care that may help supplement a HDHP. Direct Primary Care gives patients access to a dedicated medical team for a monthly membership fee. Direct Primary Care may help patients with HDHPs manage costs if they need medical care often. For example, Direct Primary Care can be used to cover management of chronic conditions, basic screenings, basic lab procedures and even low-cost generic medications.

Providers are also using technology to better meet the demand for payment plans. As previously mentioned, managing payment plans can require a lot of manual paperwork on staff. Technology is now being used to streamline these payment plans to make it easier on patients and healthcare facilities. For example, when sending patients’ a bill, facilities can include information how to enroll in an online payment plan managed through a web portal. Allowing patients to enroll in automated payments is another way to make payments easier on patients while helping close the gap in the revenue cycle. Both online payment portals and automatic payments result in faster collection of payments, less paper and increased convenience. Technology can also be used to automate patient communications regarding payments, including automated notifications about new charges, balance reminders and collections notifications.

Lastly, patient finance programs can be used to remove administrative hassle and take the receivable off facilities’ balance sheets. Healthcare facilities can work with financial institutions who offer patient finance programs to manage payment programs and collections processes. Not only do patient finance programs remove administrative burden from facilities but they may offer patients more attractive financing terms compared to other payment alternatives such as credit cards with higher interest rates.

As we look to the future of healthcare, HDHPs are likely to remain prevalent and providers will continue to find flexible payment options to help patients afford the care they need. One thing that will stay the same, however, is providers’ dedication to improving patient outcomes.

First National Bank of Omaha’s patient finance program is designed to flow seamlessly with facilities’ patient experience and payment solutions. To learn more about our patient finance program, email us at firstnationalbankhealthcarebanking@fnni.com.

First National Healthcare Banking offers a full suite of revenue cycle solutions that allow our customers to focus their time and resources on what matters most – providing the best possible healthcare services throughout our communities. We offer financing for working capital, new construction, renovations, equipment acquisitions and patient financing.

About the Author

Matt joined First National Bank in 2013. In his role as Director of Healthcare Banking, he partners with clients on lending, payables and patient financing solutions. Matt finds great satisfaction in helping healthcare providers ensure the sustainability of their organizations for generations to come.