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Patient payment responsibility increases

A TransUnion analysis finds patient out-of-pocket costs increased by nearly 22 percent from 2011 to 2012

A TransUnion report released today finds that average patient out-of-pocket costs for healthcare have grown almost by 22 percent in a year.

TransUnion Healthcare, a subsidiary of the credit and information management services company, analyzed anonymous data from 200 hospitals across the country. The hospital data is based on an amalgam of patient co-pay, co-insurance and deductible information for common procedures such as natural birth, caesarean section and major joint replacement. The hospital data was compared to financial data gathered from TransUnion’s proprietary Industry Insights Report.

[See also: CMS publishes hospital price data]

The analysis found that patient out-of-pocket costs for the specified procedures increased from $1,678 in the fourth quarter of 2011 to $2,042 in the fourth quarter of 2012. During that same period, the average consumer’s total revolving credit – an aggregate of available credit from sources such as store and major credit cards – remained essentially flat, dropping from $34,430 to $34,301. The average consumer’s revolving balance – how much a consumer owes – dropped from $13,079 to $12,373 in the same time period.

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Using a ratio of patient payment responsibility to total revolving credit, TransUnion found that in 2011, for every $100 in healthcare costs, consumers had $2,050 in revolving credit to make healthcare services payments. In 2012, they had $1,680 available for every $100 in healthcare costs.

What these numbers mean for healthcare providers, said Milton Silva-Craig, president of TransUnion Healthcare, is that price transparency and having reimbursement conversations with patients before services are rendered is increasingly important.

“When you take a look at the velocity of growth on the patient responsibility, it becomes a more meaningful and material consideration when that consumer begins to look at how they meet their credit obligations,” Silva-Craig said.

[See also: The price transparency argument]

As more payment obligation is falling to consumers, their knowing upfront how much services will cost will enable them to determine how they will juggle paying for healthcare along with their other financial obligations, he said, and give providers a better chance at receiving reimbursement.

Other findings of the TransUnion report include:

  • Those consumers with higher credit scores experienced an increase in their available revolving credit – from $21,717 to $22,587, but those consumers considered to be high risk experienced a slight decline in their available revolving credit – from $1,414 to $1,406.
  • The average deductible a consumer pays increased by more than 154 percent, from $405 to $1,032.
  • The average copay a consumer pays increased from $65 to $117.



[See also: 29 states get failing grade for price transparency laws]