Bad Debts Rising Among Insured
The website Philly.com noted the increasing trend in bad debts incurred by insured patients. Often, discussions of bad debt center on the uninsured population. With health reform, there will be an increase in underinsured patients, which has been anticipated. What is less obvious is that changes in insurance plans are trending towards higher co-pays and deductibles, especially as employers and individuals seek these plans in order to keep premiums manageable.
On one hand, increased patient responsibility helps to reduce some of the moral hazard utilization issues, present when there is little or no out-of-pocket expense. But if patients are blindsided by high costs that they did not anticipate, hospitals and other providers will see greater unpaid accounts. This adds to the uncompensated care problem, just the same as if these patients were uninsured. And that means that the costs will eventually be borne by someone.
Another concern is that healthcare pricing is far less transparent than it needs to be for patients to be able to make rational comparisons when consuming services. There are also more difficult issues regarding emergency services compared to elective ones.
Hospitals and physicians will need to be aware of high-deductible plans, and make sure that they are managing accounts receivable effectively. For elective services, patients should be made aware of their cost burden up-front. There are numerous reports of wide discrepancies between “retail prices” and “real prices” throughout healthcare. Most importantly, this is a good opportunity to review healthcare pricing at all levels, and work towards a more transparent system.