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How Out-of-Pocket Costs Affect Patient Healthcare Access

As patients face higher out-of-pocket costs, they may face limited healthcare access. Providers need to understand this and implement consumer-centered strategies to help patients.

Patients are increasingly facing high out-of-pocket costs, a trend that can limit their healthcare access and ability to pay for quality services.

It is important for providers to understand how high out-of-pocket costs can impact patient treatment utilization, how restricted access can impact overall health, and what role healthcare organizations can play in working with patients to alleviate cost burdens and help them take advantage of opportunities for necessary

High out-of-pocket costs keep patients from accessing care

Research has shown a relationship between increasing patient cost burden and health service utilization, suggesting that when patients pay more for their healthcare they are less likely to access treatment.

For example, a Physicians Foundation survey conducted in May 2016 shows that although many patients are satisfied with their primary care, they don’t often utilize it because of cost burden.

Of the more than 1,500 survey respondents, 90 percent expressed overall satisfaction with their primary care providers, specifically with their providers’ respectfulness, ability to explain complex concepts, ability to listen to them, and knowledge of their individual health histories.

Despite this, patients are likely to avoid care because of the difficulty of paying for their treatments.

One in four patients have skipped a medical treatment or follow-up appointment because of cost. In an effort to curb costs, 18 percent of patients have skipped doses of medicine, while 27 percent have skipped filling prescriptions altogether.

Two-thirds of respondents said they were concerned about paying a medical bill, and 40 percent currently have medical debt.

Clinicians are cognizant of this problem, with a June 2016 InstaMed survey finding that 74 percent of providers have witnessed an increase in out-of-pocket patient costs. According to the study, providers are concerned with the patient retention ramifications of higher prices.

“With the dramatic shift in cost sharing and ultimately healthcare payment responsibility, a new, critical stakeholder has emerged, the consumer,” explained the study. “With the focus shifted to the consumer, both payers and providers will be challenged to overhaul their payment processes or face lost revenue and poor customer retention.”

Low treatment utilization is tanking patient health

When patients don’t utilize necessary healthcare services, their overall health suffers. According to a survey by Morning Consult and the American College of Emergency Physicians (ACEP), one in four patients who skimp out on medical treatments see their conditions deteriorate over time.

According to the survey, 30 percent of patients are paying more for their healthcare coverage than ever before, and the same number are avoiding emergency treatment out of fear of high costs.

Nineteen percent of patients try to curb costs by accessing care at seemingly less pricey facilities, such as urgent care centers or clinics. However, these patients are often transferred to emergency departments nonetheless, ACEP says.

Additionally, patients who prolong emergency department visits in the wake of nagging health concerns can considerably damage their health in the long run. Patients experiencing chest pains may write their symptoms off as indigestion, when in reality they may be having a cardiac issue. Without early intervention at the first sign of symptoms, ACEP says, patients can see an underlying condition worsen.

"As a physician, it greatly concerns me that people are waiting until their medical conditions deteriorate to seek emergency care, which can have lifelong consequences," said ACEP President Jay Kaplan, MD.

What can providers do to help?

It’s important for industry stakeholders to respond to patient needs, responding to their roles as cost-bearing consumers.

In the hospital or clinic setting, consumer-centered care can take the form of efficient billing strategies and payment plans. At Family Health Care Medical Group of Modesto, billing department manager Tabitha Hickerson, CPC, saw an opportunity to digitize payments, better meeting patient needs.

“Our number one problem was that our billing staff was only available to take payments by phone during normal business hours,” Hickerson said. Family Health Care implemented an online bill pay option, allowing patients to log into a secure system to pay their medical bills from their own computers.

“[Electronic bill pay] pretty much allowed us to be able to solve the problem with our availability by giving the patients an online solution for them to make their payments,” Hickerson said. “No more of that phone tag – us calling regarding the balance, and them calling us back, and then us calling them back.”

Family Health Care Medical also worked on making out-of-pocket costs more manageable for patients by implementing payment plans, reducing any difficult decisions between getting treatment and saving money.

“As primary care physicians, our number one focus is patient care,” Hickerson explained. “With patient out-of-pockets continuing to grow each year, we wanted our patients to be able to have the peace of mind to make treatment decisions based off of medical necessity and not their finances.”

Healthcare organizations are also focusing on price transparency. By letting patients know about healthcare costs before treatment, they can shop around for the most cost-effective service.

According to a report from PricewaterhouseCoopers, price transparency is a key component to a retail-style payment model.

“A short time ago, it would have been unthinkable for American health systems to publicize how much they charge for medications and medical services,” the report says. “But now, most Americans are facing higher deductibles and other cost-sharing measures.”

At INTEGRIS Health System, price transparency systems have not only boosted patient satisfaction, but helped maintain patient retention rates, the report says. Patients who end up wanting to shop around for a lower price can be placed with a less costly provider within the INTEGRIS system, helping to coordinate care.

Going forward, patients are likely to see rising out-of-pocket costs, furthering the need for provider support. As providers see patients face increasing financial responsibility, they should consider adopting consumer- or patient-centered care and billing strategies, helping patients to manage their healthcare costs and enabling to access necessary treatment.

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