A Snapshot of Patients Who Use Healthcare Financing: 11 Things to Know

The number of hospital patients who used financing nearly doubled between 2013 and 2014, while those using it for physician bills surged by one-third.

In the past decade, Samaritan Health Services has had a rare view of the changing fortunes of many patients, not just clinically, but also financially. That’s because the Oregon-based health system, now made up of five hospitals, 80 physician offices, and four health plans serving 250,000 people in Oregon, was a pioneer in offering an outsourced patient financing program.

Since then, the payment program has evolved from term loans with interest rates to two options: a credit line at no interest for 24 months and a credit line at 6 percent APR up to 60 months for those who need longer terms. Some of the people who use the patient financing program have changed as well or, in many cases, their circumstances have.

For other providers considering one or more payment options in this era of rising healthcare consumerism and patient financial responsibility, here is a snapshot of Samaritan patients and their patient financial responsibility needs.

The vast majority of patients have health insurance. In its first year, the program helped fewer than 50 patients, almost all of whom were self-pay. Samaritan’s patient financing program now serves tens of thousands each year who struggle with high deductibles, coinsurance, and other costs after insurance. While some patients have benefited from Medicaid expansion and others have obtained health insurance because of the Affordable Care Act (ACA), overall out-of-pocket costs have increased sharply in Samaritan Health’s communities. From 2013 to 2016 alone, deductibles rose 151 percent while copayments grew by 104 percent.

All ages enroll in the financing program. Since the program began, adults of all ages have accessed financing, with no one age group dominating. In 2016, people in their 50s were the largest group of account holders, at 23 percent. Other age segments followed closely behind: Millennials ages 18 to 29 and GenXers in their 40s each represented 19 percent of program participants, while those in their 30s comprised 18 percent of all enrollees. In 2007, 18- to 27-year-olds were the largest segment of users, representing 27 percent of account holders, followed by those in their 50s at 25 percent.

Senior citizens use financing, too. Patients ages 60 and older represented 21 percent of account holders in 2016, up from 15 percent in 2007. This increase underscores that even with Medicare, seniors can have a hard time covering all of their medical expenses in a lump sum.

Women outnumber men in the program. More account holders are women than men. The numbers don’t add up to 100 percent because some patients do not identify their gender, but the pattern is clear: In 2007, women comprised 54 percent of account holders, while 42 percent were men; in 2016, the ratio was 57 percent women to 34 percent men.

More patients in total need financing. From 2013 to 2014, the number of hospital patients who used financing nearly doubled, while those using it for physician bills surged by one-third. The one-year jump was at least in part because more people were getting necessary medical treatment under the ACA. The total number of patients paying over time has subsided somewhat from the 2014 high, but it’s still thousands more than in 2013.

Average balances have been falling. With the individual mandate requiring more people to obtain health insurance and Medicaid expansion in Oregon and Washington, Samaritan saw a sizable drop in the average amount that patients financed. In 2013, the average balance for hospital patients using the program offering up to 60 months of payments was $2,118. In 2014, the first year that the mandate took effect, the average hospital balance in that program fell nearly in half, to $1,308.70. In 2016, the average amount financed by hospital patients in that program declined to $1,015.

Time to pay off has been declining. The shorter-term program saw a sharp drop in the time it took patients to pay their balances: From 14 months in 2012 to 9 months in 2016. The decline in payment time for hospital patients using the longer-term program has been more dramatic: In 2012, it took an average of 33 months to clear the balance. In 2016, patients paid off their balances in nine months.

Paying even relatively modest bills in full is a struggle. The average hospital balances in the shorter-term program, which provides credit lines at 0 percent interest for up to 24 months, has fallen a bit, from $415 in 2013 to $383 in 2016. But the number of patients using this program has increased by one-third, or thousands of people a year, over the same period.

Samaritan Health’s experience supports 2017 research that found 35 percent of adults surveyed voiced concerns about their ability to pay a medical bill of less than $500 and another 16 percent worried about affording a bill of less than $250 ( HealthFirst Financial Patient Financing Survey ).

Patients often need the program more than once. With chronic conditions and sometimes more than one family member needing medical care, Samaritan Health patients frequently take advantage of the option to add charges to their existing accounts. In 2016, the number of first-time enrollees to the financing program was only slightly higher than patients who had used the program before.

Patients want tech-enabled convenience. People of all ages are gravitating toward technology tools that give them flexibility and make it easier to manage their accounts:

• Nearly two-thirds of all account holders took advantage of the online patient payment portal in 2016.
• Nearly 10 percent have signed up to receive e-mailed alerts via the portal.
• By 2016, nearly one in three patients had opted for paperless statements, saving postage and paper costs.

Patients ages 35 to 54 were the largest users as a group of the payment portal and e-mail alerts, followed by those ages 55 and older and then Millennials ages 18 to 34. The 35-to-54-year-olds also led in usage of the mobile app, with Millennials a close second and people 55 and older in third.

Patients like a variety of payment options. Samaritan account holders have made a major shift to electronic forms of payment, representing nearly twice as many payments as phone and mail combined in 2016. One-time charges to debit and credit cards were the most popular payment methods that year, followed by Automated Clearing House (ACH) one-time bank transfers. Some patients also opt for recurring automatic payments using both ACH transfers and credit/debit cards. With introduction of a mobile app in 2016, the number of payments via the app more than doubled through October 2017 to more than 1,000.

Making Care Affordable

Samaritan Health’s senior leaders and revenue cycle management team have made the strategic decision to make financing an appealing option for patients. The goal of this program is to heal people clinically and not injure them financially. Engaging and satisfying patients with the payment program helps deliver a first-class patient experience.

Kym Clift is vice president of revenue cycle, Samaritan Health Services, and a member of HFMA’s Oregon Chapter.

Tammie Coon is vice president of client services and product development, HealthFirst Financial, an AccessOne company, and a member of HFMA’s Oregon Chapter.