Recent research released by The Advisory Board Co. reveals some worrying statistics for healthcare practices. One fact in the study showed patients were highly unlikely to make payments on any healthcare bills that amounted to more than 5 percent of their household income. So, where does this leave medical practices, and what does it mean for their healthcare payment systems?
A Closer Look at The Figures
If a family is unlikely to pay any amount higher than 5 percent of its household’s income for their healthcare bills, one wonders how much the average family must pay out before the bill you have sent to them for their treatment even gets considered. In short – what does the typical family pay for a monthly health insurance premium before it will even set foot in the doctor’s office? The recent figures make disturbing reading for practitioners across the country.
In 2015, the typical family health insurance policy came to approximately $17,545 every year. Of that amount, employers tended to contribute roughly 72 percent, which amounts to $12,591. The upshot of this is the family still must pay close to $5,000. When you consider these figures are also from a few years ago, it’s reasonable to assume these numbers have already increased.
If we use $5,000 as a basis for the calculation, we can determine this is 5 percent of $100,000. And, when we consider that 2016’s average household income for American families was only $59,039, and only a fifth of U.S. households earned more than $100,000, the result is medical insurance premiums alone are costing 80 percent of families more than 5 percent of their total income.
What Does This Mean for Healthcare Providers?
It doesn’t take a genius to work out that these figures spell trouble for medical practices everywhere. It means healthcare organizations are effectively trying to elicit payments when eight out of 10 of the practice’s patients are already spending the maximum amount that they are prepared to pay on healthcare costs on just their premiums alone.
Now, let’s add into the mix the fact that, in 2017, the average family’s annual deductible stood at $8,352. If your practice happens to be giving the patient the treatment that he or she needs during the first few months of the year, the chances of him or her having already exhausted that deductible stands at virtually zero.
It isn’t surprising so many practices today are struggling to receive payment for treatment already received, and so much staff time is being taken up by chasing debtors for money that is outstanding.
Is There A Solution?
Although there is no definitive solution to guaranteeing that every patient pays the amount that he or she owes on time, there are ways to facilitate payments to improve the chances of getting paid.
By giving patients the chance to discuss payments at an early stage, and to provide them with the appropriate financial tools to assist them in making those payments, healthcare organizations are not only helping their patients, they are helping their own revenue as well. With the knowledge that around 80 percent of all the practice’s patients are facing a financial challenge when it comes to paying your bill, giving a variety of options for making a payment, such as setting up a payment plan and facilitating payments via different methods, is key to alleviating the pressure.
BillingTree’s has developed innovative healthcare payment systems in the form of its iPayX system, which has been designed to meet the needs of today’s medical practices and to make life easier for both patients and practitioners in a tough financial environment. By increasing the range of payment options available, facilitating online and telephone payments and offering the opportunity of introducing a payment plan for large amounts, healthcare providers who adopt systems, such as iPayX, find that they improve their cash flow and improve patient relations in the process.