Patient Payment Responsibility Increases

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Patients continue to face an increased financial burden as their healthcare costs rise and revolving credit lines decline, according to new analysis from TransUnion.

The company’s Healthcare Report demonstrated how payment responsibility for medical costs continues to shift from employers to patients, a press release from TransUnion notes. Between 2014 and 2015, patients experienced a 13% increase in both deductible and out-of-pocket maximum costs. The average deductible for consumers in 2015 was $1,278 while out-of-pocket costs rose to $3,470. Medical procedures with the highest out-of-pocket costs for patients, included: Dermatology ($2,451), Orthopedics ($2,405) and General Surgery ($2,264).

“It’s clear that patients are becoming the new payer, a major source for payments to hospitals at both the time of service and after procedures,” said Jonathan Wiik, principal for revenue cycle management at TransUnion Healthcare. “As hospitals navigate this new era of patient payments, we expect to see them provide more financing options to help patients meet their financial obligations.”

Higher medical costs are likely impacting how consumers pay their medical bills. As of Q1 2016, approximately 51% of patients owe more than $1000 to their healthcare providers. Nearly eight in 10 patients (77%) owe more than $500.

TransUnion Healthcare’s proprietary ratio comparing available revolving credit to select healthcare costs reinforces this, as the ratio declined to 17.2 to 1 in Q1 2016. The ratio means that for every $100 in healthcare costs, consumers had $1,720 in revolving credit to potentially make those payments at the end of March 2016. Just one year prior, consumers had $2,250 in revolving credit for medical costs as the ratio stood at 22.5 to 1 in Q1 2015.

TransUnion’s analysis found that patients in the subprime risk tier, generally the highest-risk consumers with a VantageScore 3.0 of 600 or below, are in an even more perilous position. As of Q1 2016, these patients only had $420 in revolving credit for every $100 in healthcare costs. In Q1 2015, these same patients had $600.

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