Patients are beginning to pay for more of their personal and family-related healthcare costs than ever before in the modern U.S. healthcare system. With high-deductible plans becoming the new standard and health savings accounts (HSAs) being used to take care of financial responsibilities, more pressure is being placed on the medical billing industry to communicate payment responsibilities.
92% of consumers in the U.S. who seek healthcare services want to know what their payment responsibility will be before they schedule a visit. 3 out of 4 patients say that they become confused by their medical bills and the explanation of their benefits.
This causes a delay in collecting a balance due from these patients for providers. 73% of providers within the medical billing industry report that it takes 30 days or more to collect from their patients.
Traditional billing may be one issue that is causing these delays. 68% of patients say they prefer to pay a balance due with an electronic payment.
Important Medical Billing Industry Statistics
#1. In 2017, patients in the United States experienced an 11% increase in their out-of-pocket expenses. In total, over $1,800 was spent on out-of-pocket costs, with 49% of those costs below $500. (TransUnion Healthcare)
#2. Since 2015, patient costs for health care, which includes maximum payments and deductibles, has increased by nearly 30%. (Bloomberg)
#3. The average deductible in the United States today is $1,820, which qualifies as a high-deductible health insurance plan. (Bloomberg)
#4. Families are also facing an out-of-pocket maximum average cost of $4,400 with the medical billing costs they face each year. (Bloomberg)
#5. For doctors’ offices that support 5 or fewer practitioners, the primary collection challenge for medical billing is the slow payment which comes from patients who are on high-deductible health insurance plans. (Bloomberg)
#6. 81% of small physician practices in the United States report that they have difficulties being able to communicate the definition of patient payment accountability as part of the services that are provided. (Bloomberg)
#7. In 2016, 68% of patients who sought out healthcare services in the United States failed to pay off a medical balance fully. In 2015, 53% of patients were unable to do so to do so, while 49% failed to do so in 2014. (Newswire)
#8. To combat the issue of rising prices and unpaid bills, 83% of the firms in the medical billing industry say that they will create retail-like solutions and practices to help everyone understand and track their total costs of care. (Newswire)
#9. 86% of patients say that they receive a paper bill from their healthcare services provider for a balance due. 88% of providers say they receive paper checks and an explanation of payment when money is received. (TransUnion Healthcare)
#10. 85% of providers within the medical billing industry say that they prefer either EFT or ERA payments. (TransUnion Healthcare)
#11. 90% of providers say that payment security is a top priority when collecting a payment from a patient. In 2016, however, the medical billing industry saw more data breaches than any other year on record. (TransUnion Healthcare)
#12. 59% of consumers say that there have “significant” concerns about how secure their payments are for medical bills. (TransUnion Healthcare)
#13. States which refused to expand their Medicaid system in the United States will $423 billion in federal funds through the year 2022. Hospitals in these states will lose an additional $167 billion in funding.
#14. 3 out of every 4 patients say that their ability to understand total out-of-pocket expenses improves their ability to pay for their healthcare services. (The Urban Institute)
#15. 54% of Americans say that their medical billing paperwork, including their invoices, is either “always” or “sometimes” confusing. (The Urban Institute)
#16. 62% of patients in the United States say that they are “always” or “sometimes” surprised by the total amount of their out-of-pocket costs for the healthcare services they receive. (The Urban Institute)
#17. Healthcare premiums in the United States are consistently growing at 4 times the rate of inflation. Through benefit costs and premium sharing, employees are responsible for paying $0.41 of every healthcare dollar that is spent. By 2020, more than half of these costs will be the burden of the worker. (TransUnion Healthcare)
#18. The cost of uncompensated care has more than double in the past decade. (AETNA)
#19. 75 million people report that they struggle to either pay their medical bills or were paying off some type of medical debt. In 2005, only 58 million people were in the same situation. (American Hospital Association)
#20. In 2012, hospitals provided $45.9 billion worth of uncompensated care services to patients in the United States. That represents over 6% of their annual hospital expenses for the year. (Commonwealth Fund)
#21. 60% of Americans say that they would prefer their invoices to be sent exclusively through electronic channels or to have the option of that type of service at the very least. (American Medical Association.
#22. Patients who do not show up for a scheduled appointment with their health care provider create an expense of $150 billion with the U.S. healthcare system each year. (BillTrust)
#23. The national average for bad debt in the United States is 3.3%. For charities, it is 2.1%. In the healthcare industry, the rate of total uncollectable accounts can be as high as 9.9% in some geographic regions. (Pittsburgh Post-Gazette)
Medical Billing Industry Trends and Analysis
By 2020, up to 90% of patients are expected to start paying their healthcare bills at a slower rate, failing to pay off their total balances. This presents a challenge to the medical billing industry. Even if patients are aware of their responsibilities for payment, one cannot collect funds that do not exist. This issue will likely raise the number of medical billing-related bankruptcies which occur in the United States, which will put even more pressure on the industry.
The medical billing industry has often been the cause of its own headaches. Many patients discover that every visit to their local provider creates a new account. Some agencies will not consolidate these accounts, even upon request. That produces a series of bills, sometimes 8-10 per month, that can be difficult for patients and families to track.
That is why it costs 4 times more to collect from a patient then it does to collect from an insurance company.
30% of the average health care bill is paid for by the patient in the modern healthcare system. Total U.S. healthcare spending reached $3.2 trillion in 2015. More than $10,000 per year is spent per person on healthcare related needs.
With streamlining and transparent communication, the medical billing industry could solve many of the problems providers and patients face today. The only question is this: will the industry make the necessary investments?