Healthcare financial leaders say high-deductible health plans, whether pushed by employers or offered through the exchanges, are rapidly expanding the risk of non-payment. Many consumers choose plans with the smallest upfront cost and largest deductibles, and they often lack a thorough understanding of the plans.
This article first appeared in the January/February 2015 issue of HealthLeaders magazine.
Over the last few weeks, I've asked several healthcare executives what they see as the biggest revenue challenge their organization will face in 2015. The response has been unanimous: high-deductible health plans.
As patients become increasingly accountable for paying for their own medical care, hospitals, health systems, and other provider organizations have more dollars at risk for non-payment than ever before because it is generally more difficult to collect from patients than from commercial and government payers.
More self-pay means more risk
The health insurance exchanges pose a big threat to revenue because many consumers are choosing plans with the smallest upfront cost and largest deductibles, says Bill Pack, vice president, finance and hospital operations at Denver-based SCL Health, a $2.4 billion health system with eight hospitals and 2,151 licensed beds in Colorado, Kansas, and Montana.
"This first year of having the exchanges, we've learned a lot, and patients are also learning a lot. Mostly, we think patients go online and shop for a plan, and they pick the bronze plan because that has the lowest premium, although usually also the highest deductibles and lowest benefits. Because of that, we're starting to see a lot more self-pay obligation after insurance."
Pack says SCL Health expects to treat even more patients with high-deductible plans in 2015.
"Are patients going to remain in the same plan now that they are finding out they have a large out-of-pocket expense that they didn't previously truly understand? I'm sure there will be a large percentage of patients who will do that, and I think we'll see more and more of it. People do tend to shop by price. They are buying what turns out to be what we consider catastrophic coverage because they see the lower premium, and then they end up not being able to pay their medical bills."
Nate Hunt, director of operations at University Hospitals Accountable Care Organization—which is part of University Hospitals of Cleveland, a $3.5 billion system with 15 hospitals and 2,414 registered beds—says that high-deductible plans are a major concern in his market.
Rene Letourneau is a contributing writer at HealthLeaders Media.