3 effects of rising healthcare costs and how providers should respond

September 15, 2022 by Experian Health

A new joint report from Experian Health and PYMNTS, published in July 2022, found that a fifth of patients spent more on healthcare than they could afford in the last year, causing financial distress. Rising healthcare costs, compounded by inflation and fears of recession, have caused more patients to struggle to pay their bills. Patients know that healthcare is likely to be expensive, but they don’t always know exactly how much they’ll owe – and therein lies a big part of the problem.

Surprise billing is a predictable pain point for patients and providers alike. If patients don’t receive accurate pricing estimates before care, it’s difficult for them to plan their payments. While 98 million Americans say they have cut back on essentials such as groceries and fuel to help cover the cost of healthcare, fear of surprise bills has caused many patients to forego care altogether.

The report, “The Healthcare Conundrum: The Impact of Unexpected Patient Costs on Care,” takes a deep dive into the growing problem of surprise billing and what it means for patient care. This article gives a snapshot of those findings, and what providers can do in response to rising healthcare costs.

What happens when patients can’t pay their bills?

1) Patients are postponing care due to rising healthcare costs

According to Experian and PYMNTS data, nearly half of consumers who canceled a healthcare appointment or procedure in the past year did so because of the high cost. Millennials and consumers living paycheck-to-paycheck were most likely to cancel appointments after receiving a high estimate.

Postponing or avoiding care can have a major impact on patient health: undiagnosed or untreated medical conditions may worsen, leading to an escalation in symptoms. This, in turn, may lead to even more expensive treatments, which exacerbates the initial problem. For providers, cancellations and delays cause workflow disruptions, wasted clinician time, and lost revenue, as care can’t be delivered efficiently.

There is recently enacted regulation to tackle surprise medical billing, and providers can get ahead of the problem by providing upfront price estimates to patients. When patients have clear and accurate estimates, they’ll be able to make better-informed decisions about their care and financial planning. With Patient Estimates, providers can feel confident in the estimates they’re issuing to patients. Figures are generated using chargemaster data, claims history, payer contract details and insurance information. The estimates sent to patients (via a user-friendly, self-service portal), also incorporate relevant discounts and payment plans to give patients the most accurate estimate of their out-of-pocket expenses.

2) Patients are switching providers in search of a better patient payment experience

Incorrect cost estimates and surprise bills have caused patients to switch to different providers, which is another provider concern. Around 60% of patients who’d received poor estimates or unexpected bills said they’d consider switching to a provider that offers a better payment experience. As many as 26% of patients who paid out-of-pocket medical expenses said they would switch providers, with this rising to 41% among millennials.

The clear message for providers is that if they want to retain the competitive edge, they need to offer the best financial experience. In Experian’s State of Patient Access 2.0 survey in 2021, patients said they wanted a seamless consumer experience, with quick and convenient ways to pay. Millennials and younger generations are especially keen to see more digital options. Automated patient estimates and digital patient payment solutions should be part of that offer.

Patients also welcome clarity about their financial pathway. Providers can draw on advanced data analytics to assess each patient’s financial situation and offer recommendations and options that fit their specific circumstances. For example, Patient Financial Clearance helps providers determine which patients have the ability to pay upfront, and which may need financial assistance or payment plans. They can use this information to guide them to the right pathway quickly and efficiently. It’s a more compassionate experience for patients, and saves providers from chasing the wrong accounts, meaning they get paid faster. Similarly, Coverage Discovery can help fill in the gaps when it comes to the patient’s insurance, by tracking any missing or forgotten coverage. This can drastically reduce the patient’s out-of-pocket expenses, while maximizing reimbursement for providers.

3) Patients are demanding personalized payment plans and easy payment options

Finally, it’s clear from the report that patients would welcome clear, easy-to-understand financial information throughout their healthcare journey. Providers that offer personalized payment plans will not only create a more supportive and straightforward financial experience for patients, but they’re also likely to boost patient retention and get paid faster.

PatientSimple uses Experian’s unmatched datasets to identify the optimal financial pathway for consumers. It then guides them through the process using a consumer-friendly and mobile-compatible self-service portal. Patients can choose to pay in full or through payment plans. Other options include digital statements, automatic email notifications about due payments, guest pay options, estimates, and information about qualifying for financial assistance. And because clear, compassionate communication is so important, it also allows providers to send personalized messages that make the whole payment process easier for patients to navigate.

Download the report, The Healthcare Conundrum: The Impact of Unexpected Patient Costs on Care,” to see a full breakdown of how different patient populations are experiencing and responding to the challenge of surprise medical bills and rising healthcare costs.

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