Analysis: Out-of-pocket costs increased faster than wages in 2018

On June 25, TransUnion Healthcare released the results of its analysis of patient out-of-pocket costs at HFMA’s Annual Conference. The report finds that across all services (inpatient, outpatient and ED) in 2018, out-of-pocket costs increased 12%. Over roughly the same time period wages grew approximately 3% for workers, according to a Bureau of Labor Statistics news release.

The average cost sharing in 2018, according to TransUnion Healthcare is as follows:

• Inpatient stay – $4,659
• Outpatient hospital services – $1,109
• ED visits – $617

The median liquid household savings for families between 250% to 400% of the federal poverty level was $3,426, according to a Kaiser Family Foundation Issue Brief, implying that for a large portion of the population, an inpatient admission will cost more out-of-pocket than they have readily available.

Takeaway

 As described in HFMA’s “Medical Account Resolution Process” Best Practices,” hospitals and health systems need strategies to engage patients in a discussion about their out-of-pocket responsibility, identify who might be eligible for financial assistance and/or develop payment plans.

Piedmont Healthcare is an example of an organization that is trying to engage patients in advance for elective services.

Modern Healthcare is reporting that Piedmont Healthcare requires uninsured, self-pay patients and those with high-deductible commercial policies to pay 25% of their bill before they can receive non-emergent services.

“The new policy is the latest phase in what has been five years of improved patient education around out-of-pocket costs, including sending patients price estimates — even if patients didn’t ask for them —prior to almost all services,” according to Modern Healthcare.

The policy allows Piedmont’s physicians to escalate cases to administration when patients need care urgently to ensure that access to care is not inappropriately denied in emergent situations. The policy was implemented in phases, with the first phase requiring 15% pre-payment for walk-in visits and the second phase expanding to scheduled services like surgeries.