Companies like PatientPay, iVinci Health, and InstaMed make it easier for patients to understand, manage, and pay their bills, but otherwise do not change how and when the patient is introduced to the payment process. Several digital health companies are working to solve certain aspects of the consumer payment problem. Restructuring the payment model would transform how and when patient payments are introduced, discussed, administered, and collected. The more that transparency becomes a standard of care, the more pressure industry leaders will face to provide it as part of their services. To do this, the industry must shift toward a more traditional buyer and seller dynamic, and provide patients with the information needed to be knowledgeable consumers. Health care providers, hospitals, pharmacies, and the like must make it easier for patients to navigate the payment process and make it more informationally symmetrical. A shift in coverage requirements to high-deductible health plans will mean more of that happening in the future. Hospitals and providers, in turn, are grappling with what to do when patients default on payments. Many ultimately feel ill-equipped to handle payments due to health care’s confusing bureaucratic structure.Įven though the expectation for high-deductible health plans is for patients to have “skin in the game,” the system is designed to weaken patients’ bargaining power and practically eliminates any opportunity for them to be fiscally responsible or meaningfully involved in their care decisions. It’s far too easy for patients to become confused with how much they owe, why they owe it, and who they owe it to. Patients are blindsided by separate - and often expensive - bills from an unforeseen out-of-network provider who happened to be the one assigned to deliver care. Many patients fall victim to the invisible boundaries that exist between in-network and out-of-network coverage. Information asymmetry isn’t the only problem. Pricing varies widely between facilities and providers, and has little to do with the actual quality or value of the services received. And there’s no Kelley Blue Book for health care. Health care is generally reactive by nature - treating a broken arm, for example - so preliminary research, and even the ability to choose when and where care will take place, is often out of the question. This is quite different from traditional consumer marketplaces, like the automobile industry, in which buyer and seller have equal access to information and bargaining power. In practice, it means that patients have no idea what a test, procedure, medication, or stay in a particular hospital will cost before receiving these services. This concept, introduced by economist Kenneth Arrow in the early 1960s, laid the groundwork for his pioneering study on health care economics. Information asymmetry occurs when consumers are at a severe disadvantage because they know far less about the services and goods than does the seller. It is almost impossible for patients and their caregivers to be savvy health care shoppers because health care, especially in the acute or emergency setting, is an asymmetric market. Given the current administration’s wavering health care agenda and lingering uncertainty around reform, payers will respond by transferring more financial risk onto patients and consumers. Providers will also feel the pain - they are pretty good about collecting initial copays from patients, but often have trouble collecting any costs not covered by insurance. Such plans will force a large number of consumers to take greater responsibility for their health care costs and pay out of pocket for health care expenses, almost always without knowing the cost of the care they receive. These offer lower monthly premiums for a higher deductible, the amount of money people must pay toward their care before their insurance starts covering the costs. Exclusive analysis of biotech, pharma, and the life sciences Learn Moreįinancial toxicity: 1 in 3 cancer patients have to turn to friends or family to pay for careĪs we wait for details on what, if anything, will replace the Affordable Care Act, it’s likely that high-deductible health plans will play a significant role in health insurance.
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