While Most Consumers Want to Discuss Costs Before Receiving Treatment, Most Providers Do Not Bring Up Financing Options with Patients

Seventy-seven percent of health care consumers say it’s “important” or “very important” to know their costs before treatment; however, most providers are not satisfying these demands, according to a recent article in Healthcare Finance.

Only 18% of health care consumers said that “any of their providers had spoken to them, at any time, about patient financing options in the past two years.” The article summarizes the results of a survey conducted by ORC International and commissioned by patient financing company HealthFirst Financial.

The survey highlights consumers’ interest in financing options for health care services: 53% of the 1,011 U.S. adults surveyed would like to discuss financing options before they receive care, and 57% consider it important or very important that their provider offer ways to extend payments over time with no interest.

However, only 8% received zero- or low-interest financing from a provider. “These findings highlight a huge gap in what patients want and what hospitals, medical groups and other healthcare providers are delivering,” KaLynn Gates, HealthFirst Financial president and corporate counsel, says in the article. “Providers that care for the financial as well as clinical needs of their communities are much more likely to thrive in this era of rising out-of-pockets costs and growing competition for patients among traditional and non-traditional providers.”

Furthermore, “a full 40% of millennials 18 to 36 years old said they’d be very likely or likely to switch providers if a competitor offered low- or zero- interest financing for medical bills.” And among survey participants overall, 29% “said they’d move to different providers that offer attractive payment programs.”

Concerns about covering the cost of care exist in all income brackets; 42% are very concerned or concerned about their ability to pay out-of-pocket medical bills in the next two years, and the number increases to 54% for those with incomes of less than $35,000 a year. Among those with incomes of $100,000 or more annually, the number drops, but still, 24% in this bracket are very concerned or concerned.

Consumers are worried about their ability to pay for unexpected medical expenses; 53% of those surveyed expressed concern about the ability to pay a medical bill of less than $1,000; 35% worry about the ability to pay a bill of less than $500, and 16% are concerned about the ability to pay a bill of less than $250.

The survey was commissioned in order to “learn more about how consumers are coping with their medical expenses,” Gates says in the article. “Without providing and communicating these viable financing options, they are likely to delay care or switch providers to find financial help. In either case, providers will be hurt by those choices, and they need to develop a strategy to meet these consumers’ needs.”

Despite these findings, however, another survey, published recently in Health Affairs, finds that while most U.S. consumers support price shopping for health care services, most do not actually seek out information on pricing.

The findings also come at a time when states are taking various measures to improve price transparency for consumers. For example, Ohio has enacted a law aimed at informing patients what health care procedures will cost prior to receiving care. However, the law is currently in limbo, after criticism from hospital and physician groups, who claim the law would slow down access to care.

This HealthFirst survey reinforces what we’ve said in the past and what other studies have shown; for example, we blogged earlier this year about a study published in Health Affairs showing that physicians are missing opportunities for communication to help reduce patient costs. We’ve also written about employers sending patients to high-quality, bargain-priced providers; sometimes these providers are out of town, or out of state, yet employers are still able to save money with this approach, which points to inefficiencies in the health care system.

Clearly consumers need price options, and talking with physicians beforehand about costs would help inform patient decision-making. However, it’s noteworthy that this new survey emphasizes consumers’ desire for financing options; thus, consumers appear to be seeking to base their costs decisions not on actual total costs of services, but on monthly payment options. They are therefore not necessarily taking a savvy approach to overall costs.

One area of cost concern that the survey did not cover, but which is coming up soon for most patients, is the annual deductible that most health plan enrollees must meet. Each year, consumers must consider the re-setting of the deductible on January 1, and factor that into health care choices. This is a particular concern for patients with chronic illness, and it points all the more to the need for consumers to know their costs upfront, before services are provided.