Patients can Shop Online for Medical Procedures

Consumers can shop online for cars, clothes, and even romantic partners – but medical care?

Yes, medical care.

Medibid, an auction site founded by Ralph Weber, offers patients the opportunity to solicit bids for a variety of medical procedures from doctors enrolled on the site. For a tiered subscription fee, patients and doctors alike can either place or bid on single requests or unlimited requests. Once the patient accepts a bid that covers the full cost of the procedure, they make arrangements directly with the physician and pay for services by cash or credit card in full.

Proponents of bidding for medical service, including Weber, argue that this development is an organic evolution of the online marketplace that will allow consumers to take control of their healthcare spending in a way that insurance providers and hospital systems do not. Medibid providers, who are largely in small practices or run their own surgery centers, are able to charge lower fees without compromising their profit margins because they can skip the costly step of billing insurance plans.

However, a number of critics point out several drawbacks to the online auction approach to medical care despite acknowledging the difficulty of navigating (and paying) hospital prices. Red flags include fewer regulations of physician-owned outpatient centers, lack of “quality indicators” to support the doctors bidding on procedures, and the potential for complications that are not covered by the Medibid agreement.

Hospitals may be getting the message – a number of hospitals around the country are beginning to post their procedure prices (minus surgeon’s fees) on their Web sites. The aim of hospitals that choose to do so (and the states that have mandated the practice) is to help patients make the best decisions for the care based on price and quality.

PRN Funding offers a number of healthcare factoring options to help healthcare vendors close the cash flow gap. Learn more about healthcare factoring solutions for your company and apply today.

Insurance Premiums Will Rise in 2015 – But Not by Much

Virginia insurance carriers have already filed their plan adjustments for 2015, indicating expected rate increases.

Early predictions of 2015 insurance rates had insurers raising premiums by exorbitant amounts to compensate for higher costs and restrictions imposed on their fee structures by the Affordable Care Act, as well as the greater health needs of previously uninsured enrollees who obtained healthcare during the open enrollment period. However, if Virginia filings are representative of how the nation will go then average rate increases will fall short of expectations.

Average increases will not apply equally to policyholders across the board, and range from just above three percent to nearly 15 percent depending on the provider. Those averages, meanwhile, will vary greatly in their individual application. Some providers are adjusting for average enrollee ages that skew higher, as age is one factor that allows them to differentiate. Providers are no longer able to price their premiums based on the enrollee’s current health unless s/he is a smoker.

Some states such as Washington may release their 2015 rates within the next several weeks, though most will complete their projections by the end of the summer.

Rising insurance rates are nothing new but may precipitate slow payments and other rising costs of healthcare. If you need to close the gap between service and payment in your healthcare company, consider PRN Funding’s comprehensive healthcare factoring programs. We work with healthcare vendors providing services to hospitals and other medical facilities – learn more and apply to get started today!

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Up-Front Deductible Payments on the Rise

Need to see the doctor? Be prepared to pay at the door.

Up-front deductible payments

The Affordable Care Act has prompted a shift toward low-premium, higher-deductible health plans, both employer-provided and available on the exchange. In order to collect as much of the out-of-payment cost as possible, many health providers have responded by requiring up-front payment from patients before receiving nonemergency treatment. Insured patients at these facilities must pay their co-pay, co-insurance, and deductible up front, and uninsured patients are responsible for the full (estimated) cost of treatment.

Administrators at facilities currently using this practice argue that it is the most effective way to receive payment, particularly when so much of the burden is shifting to the patient. A great deal of costs for medical treatment become bad debt – in 2011 alone, hospitals provided $41 billion in care that was never paid for. Hospitals attribute this to patients’ reluctance to make their health spending a priority, and to a lack of awareness of financial assistance programs that can eliminate the strain of a single large payment.

The up-front model is an extension of one already in practice in most doctors’ offices around the country, where co-pays and co-insurance are collected at the check-in for an appointment. By implementing the practice in hospitals, administrators state that they can connect patients to financial assistance sooner and increase the likelihood of full payment.

Opponents of the idea, however, point out that up-front payments may create a barrier to receiving health care. As deductibles continue to rise, patients will be increasingly unable to cover the cost of their care and may elect not to seek treatment – in effect, creating a situation directly opposite the intended outcome of the Affordable Care Act.

PRN Funding offers healthcare factoring and medical receivables factoring services to vendors and facilities struggling to bridge the cash flow gap. Before shifting to the up-front model, contact us to see how we can help you meet your cash flow needs and continue to provide quality care to your patients.

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Employee Healthcare Premiums Expected to Rise in 2014

Starting next year, employees may encounter a significant increase in healthcare premiums. Companies currently offering health insurance to workers are expected to add nearly $5,000 in premiums, deductibles, and co-payments to current health coverage costs.

Aon Hewitt also revealed a projected increase in average health care costs by 6.7 percent in 2014, amounting to $11,176 per employee. Despite the single-digit increase, health cost rates for employees continue to increase by double-digit percentages. Premium payments are also on the rise: employees are projected to pay 22.4 percent of this total, or $2,499. Overall, worker premiums are jumping nearly ten percent from this year’s rate of $2,303.

In addition to the increase in premium payments, employees can expect a rise in out-of-pocket costs including co-payments and deductibles. These costs will increase from this year’s rate of $2,239 to $2,470 in 2014, a projected increase of more than ten percent. As a result, many workers will get a glimpse of rising healthcare costs for the coming year whether they opt to renew current plans or choose new benefits during fall open enrollment.

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.

Medical receivables factoring is a solution for medical providers waiting on slow-payment. If your healthcare facility bills third-party vendors such as Medicare, Medicaid, HMOs or commercial insurance companies, medical factoring can get you the cash you need today.

Employers Cut Back on Generous Health Plans

According to a recent New York Times article, companies that offer high-end health plans are scaling back benefits to employees. This is because of a so-called Cadillac tax, which penalizes companies that offer these sorts of plans. The purpose of the tax is to discourage employers from plans that shield employees from the high costs of healthcare and can lead to excessive and unnecessary medical procedures. The tax is highly controversial, but intended for employers to consider long-term healthcare cost control.

Companies that are scaling back their health plans are going to be looking to control their business costs in other ways as well. One way to do that is through invoice factoring, which is the sale of unpaid invoices for cash advances. Proper cash flow is a step in the right direction for companies struggling to meet healthcare reform requirements, and could be a blessing amidst the current uncertainty.