Paying For Healthcare With Rising Deductibles And Declining Coverage

Rising inflation is impacting people across the country. In June, prices were  5.4% higher than just a year before. These numbers represent the largest spike since 2008. Now, Americans are contending with rising costs of living as a result.

One of these increasing costs? Healthcare. The average deductible in 2010 was  $646. Just over a decade later, the average deductible is now $1,644. Patients are paying more than ever for healthcare – regardless of whether they have insurance coverage.

The patient-as-payer model is becoming increasingly prominent in healthcare. With the rise of high-deductible healthcare plans, patients pay more costs out of pocket before insurance coverage kicks in. And with the recent high unemployment rates, many people have no coverage at all; an estimated  5.4 million people  have lost health insurance since the pandemic. With a huge number of Americans either uninsured or underinsured, patients have largely become the payers – not their insurers or employers.

What does this mean for the healthcare providers accepting those payments? Most were set up to ingest the bulk of payments from insurance companies or other public payers. Historically, that’s how payment was done when individual payers represented only a small portion of overall revenue.

Now, with the shift of payment responsibility resting with individuals, healthcare providers will have to accommodate different expectations for communication, service, and support. They will need to focus on offering customer-driven healthcare and applying a personalized touch. Otherwise, patients – just like any other consumer – will shop around and might go to a different provider that does.


Rising Healthcare Costs and Patient Collections

Revenue cycle management plays a major role in the  patient experience. It’s another changing part of healthcare. Before, health systems centered their revenue cycle management strategies on commercial and government-funded health insurance plans. But with the rise of high deductibles and the patient-as-payer model becoming more common, these changes have had significant implications.

The cost of deductibles has  risen significantly faster  than wages. People are spending more of their incomes than ever on healthcare, resulting in high numbers of unpaid medical bills and extended payment plans. In fact, according to one survey,  1 in 5 people  said they struggled to pay (or didn’t pay) medical bills over the last two years.

Patient collection rates were not an issue in the past because they were not a major component of provider revenue. Now, the opposite is true: Patient collection rates and a provider’s financial position are closely linked. Patients increasingly expect seamless billing solutions and transparent, intuitive payment processes.

This is where revenue cycle management tools come in. These tools enable healthcare organizations to offer patients financial counseling based on past payment behaviors and connect them with the most appropriate payment options or financial assistance. Revenue cycle management tools also give patients a more customized experience and empower them to best work with their providers while playing an active role in their care.


The Benefits of the Patient-as-Payer Model

Although the patient-as-payer model might have developed in response to rising deductibles and copays, it could ultimately benefit patients in several ways down the line.

First, patient collections will be more flexible and will revolve around finding workable solutions. Second, providers will have an obligation to keep costs transparent and disclose upfront. Consumers will be better equipped to seek out the providers and services that fit into their budgets, and the providers who innovate in those areas will attract more patients.

The patient-as-payer model puts the individual at the center of the process and empowers providers to cater to them like never before. The implications are huge for the healthcare economy, but there’s reason to believe it will lead to better healthcare and an improved patient experience for individuals everywhere.


Convenience in Healthcare Payments

Consumer-driven healthcare is the future, providing patients with more knowledge, control, and confidence. Americans experiencing rising deductibles and copays  now  can use these strategies to make paying for healthcare  more friendly and fulfilling:

  • Plan ahead:  Many healthcare providers and carriers now offer upfront cost estimates to provide patients with financial transparency prior to services rendered. Patients need to research these costs before any procedures or appointments take place to avoid any surprise out-of-pocket costs or deductibles. Data-enabled revenue cycle management solutions leverage technology to calculate costs, which can be easily accessible through patient portals.
  • Pay conveniently:   In the interest of boosting patient collection rates, providers are starting to allow people to pay however they find most convenient: by check, card, online, at time of service, with digital wallets, and so forth. Find whichever option makes paying for healthcare most convenient for you. Vet providers based on whether they offer a convenient and customized payment process, asking questions about how their revenue cycle management processes and tools can benefit you.
  • Talk with an expert:   Medical bills can sometimes be complicated and – at times – overwhelming. There’s no reason for a patient to be confused or frustrated when it comes to billing questions. Patients should feel empowered to contact their healthcare provider’s billing partner directly to answer any questions. A trusted billing partner will help patients by providing compassionate care and convenience with chats, texting, emails, or 24/7 support.
  • Keep track:   When it comes to medical information, security and convenience are both critical. By leveraging a mobile-enabled, secure billing portal, providers can empower patients with their medical information at their fingertips – via desktops or mobile devices. This approach enables quick access to account balances, insurance details, payment plans, and even electronic receipts. For an enhanced patient experience, patients can also receive text notifications about upcoming appointments and balances coming due.


Healthcare costs are a source of anxiety for many. Just remember this: In today’s world, the payer has the power. You can proactively seek the care and payment processes that are best for you  and  your budget. In the process, you might influence future transformations in healthcare and improvements to the patient experience.


T. Scott Law Sr., CPA, is the founder and CEO of Zotec Partners. His mission is to partner with healthcare providers and their patients across the country to simplify the business of healthcare and continually innovate the patient financial experience. Scott graduated from Butler University with a Bachelor of Science degree in accounting. He is a member of the Radiology Business Management Association, the Medical Group Management Association, and the American College of Radiology’s Radiology Leadership Institute.



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Written by HealthStatus Crew
Medical Writer & Editor

HealthStatus teams with authors from organizations to share interesting ideas, products and new health information to our readers.

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