'Game-Changing' Direct Care Model Helps Ease Health System's Bad Debt
Savannah's Memorial Health offers small businesses a direct care model to help employers afford healthcare for their workers. It benefits the health system by smoothing revenue—but don't call it a health plan.
Savannah's Memorial Health, like many hospitals and health systems trying to figure out the implications of healthcare reform, has seen an increasing level of bad debt and struggles with primary care affordability among its patients.
Memorial Health, which covers 35 counties in southern South Carolina and northeast Georgia, exists in a service area where many small to mid-size employers are trying to continue providing healthcare benefits for their employees, but are being squeezed under traditional health plans because of their small size.
Call it an unintended consequence for which there are many contributing factors.
As a result, the service area has seen a dramatic rise in the underinsured, says William (Bill) Lee III, the chief strategy officer for the system anchored by 635-bed Memorial University Medical Center.
Given a pace of premium inflation that few of them can afford, many such employers have tried to limit their exposure by offering employees stipends to purchase health insurance on their own. But a rapidly increasing number of individuals just aren't doing so, says Lee.
For the health system, that means an increase in self-pay patients over the past year. And collecting relatively low-dollar, but still important, revenue from patients directly is a big problem.
"When you are serving an ED with over 100,000 annual visits, and a lot of the patients have high-deductible health plans, which often don't pay until a $1,500 or even $5,000 deductible is met—and it's easy to spend that in one setting—we've got to be able to collect those dollars," says Lee.