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93% of Patients Negotiate Out-of-Pocket Patient Costs, Debt Away

Patients said their negotiations were partially or fully successful at mitigating high out-of-pocket patient costs.

More than half of Americans have been in medical debt, but according to new data from LendingTree and Qualtrics, the vast majority of those who have negotiated that debt have seen it go away, a key trend in understanding out-of-pocket patient costs.

The question, however, is whether the onus should be on the patient, as opposed to the provider or payer, to negotiate away high healthcare costs.

The survey of 1,550 adult patients in the US showed that 37 percent of people currently owe some sort of medical debt, and another 23 percent said they’ve been in medical debt before. The average medical debt is not small, shaking out to between $5,000 and $9,999, the survey showed.

Most people owe more than $1,000 in medical debt, while a notable 13 percent said they owe more than $20,000 in medical debt.

Most of that stems from unexpected services, the survey continued, particularly emergency department visits. Thirty-nine percent of patients said they have medical debt from an ED visit, while 28 percent said their debt was related to doctor or specialist visits and 26 percent to surgery.

Notably, about a fifth of patients said their medical debt was for what many in the industry consider shoppable services, like childbirth (22 percent) and dental care (20 percent). However, lapses in price transparency and patient financial healthcare literacy may have led these to still be surprise bills.

The survey also found that medical debt is getting in the way of other types of spending. Nineteen percent of respondents said their high medical debt was keeping them from purchasing a home, for example.

Sixty-eight percent of respondents suggested mounting medical debt is a serious cause of stress, with those respondents saying they have lost sleep worrying about medical debt.

This is consistent with previous surveying, which has found both that medical debt discourages other types of medical spending and care access as well as caused serious mental distress. In September 2020, polling from West Health and Gallup found that about half of Americans fear medical bankruptcy. Those fears are more salient in young adults and non-White adults.

The LendingTree survey showed that patients are turning to various avenues to pay off medical debt, with a third saying they dipped into their savings to pay off medical debt, the most common response from participants.

Others did things like work out a payment plan with their provider or payer, cut other expenses from their budgets, took on more credit card debt, or took on another job. More nuclear options included borrowing money (9 percent), filing for bankruptcy (8 percent), or tapping into retirement savings (5 percent).

Remarkably, the survey showed that negotiations can also be extremely effective at mitigating medical debt. Nearly all—93 percent—of the respondents who said they have negotiated with a payer or provider have been successful.

In total, 75 percent of those who have had medical debt said they’ve negotiated their medical bill, with this trend skewing more common among younger respondents. About two-thirds of those negotiating a bill did this on their own, while 26 percent used a service and 9 percent asked a family member for help.

Most respondents said they asked to have items removed from their medical bills.

Success varied depending on the respondent, although 60 percent said they were entirely successful, meaning they got the disputed bill dropped. Another 32 percent said they had the disputed bill partially dropped.

Patients who may successfully negotiate their medical bill would know what should and should not be covered by insurance and be able to pick their way through an itemized provider bill. They may also be able to navigate payment plans, pay part of their bill at the point of service, and enroll in a payment plan.

However, the question remains, to what extent should this navigation fall on the patient and not the entities to whom they owe the bill? Patient financial responsibility can yield a better experience through certain engagement efforts, like patient-centered billing and navigable price transparency.

These, and other, data suggest that those services aren’t widespread. In November 2020, a Market Cube and Waystar survey showed that poor patient-centered billing left patients in dire financial straits. Thirty-seven percent of those survey participants said a convoluted medical bill left them paying late and with a poor financial experience.

Meanwhile, price transparency is falling by the wayside. Although CMS hospital price transparency requirements went into full effect at the start of 2021, a January analysis found most leading hospitals aren’t delivering on that.

And when patients do have access to price transparency tools, they aren’t being marketing in a way that will yield meaningful use. A recent Health Affairs study revealed that even when patients have access to and even use price transparency tools, they’re picking the same high-cost clinicians. Better financial health literacy could help combat that issue.

As medicine continues to confront competing demands of a good patient financial experience and a healthy revenue cycle, giving patients the tools to navigate the billing process will be essential.

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