Patients Paying More for Hospital Care

According to new data from TransUnion, patients are paying even more for hospital care out-of-pocket, and access to credit that would help pay for treatment has diminished for some consumers. The agency analyzed data from 200 hospitals across the U.S. and compared it with their proprietary financial numbers.

The report found that the average patient payment responsibility on crucial medical procedures has increased practically 22% in the last year, from $1,678 in 2011 to $2,042 in 2012. The cost encompassed all of a patient’s inputs, including co-payments, co-insurance, and deductibles. The average deductible grew to $1,032 from $405, while average co-pays jumped to $117 from $65.

“Most people understand that healthcare costs have been increasing during the last decade, but TransUnion wanted to specifically take a look at the impact of those costs on the consumer wallet,” said President of TransUnion Healthcare Milton Silva-Craig. “Hospitals are discovering that data, analytics technology and improved infrastructure are needed to ensure they understand the payment behavior of patients, through a consumer lens, as they strive to better manage their reimbursement processes.”

Over the same period, credit accessible to the average consumer through credit cards, store cards and home equity loans was low, decreasing marginally to $34,301 from $34,430. TransUnion found that at the end of 2011, for every $100 in health care costs, consumers had $2,050 in revolving credit to make their health care payments. But at the end of 2012, the ratio dropped to 16.1 to 1, or $1,680 in available credit for every $100 of health costs.

“In the short term, it appears consumers on average have been able to successfully manage their increased out-of-pocket medical expenses with their existing credit facilities,” stated Silva-Craig. “But as those costs continue to rise, there is a concern that consumers — particularly those in the nonprime credit tiers, already strapped for cash — may find themselves in a tight position financially, as healthcare costs compete for a larger share of their disposable income.”

Even those with top-tier credit scores saw their access to revolving credit rise, but subprime borrowers, with the riskiest credit profiles, saw it fall. That caused concern that consumers may have trouble finding the means to pay for hospital care, as health costs use up more of patients’ disposable incomes.

“With more and more people struggling to make payments, healthcare organizations must ensure they are doing all they can to engage their patients in an open and transparent manner in determining the best method in which to make payment or assist them in qualifying for some type of benefit,” said Silva-Craig.

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