Gallup’s annual Health and Healthcare poll found that Americans delaying medical care due to cost reached its highest level in 2022, amid the highest inflation rate in the U.S. in over 40 years. Lower-income households, women and young adults are disproportionately affected. This trend poses significant public health concerns, as untreated medical conditions may result in more severe health complications that escalate costs in the long run. Here, we’ll share how hospitals can help turn this trend around.
With the rising financial responsibility placed on patients—through increased deductibles, copays and coinsurance—it’s not surprising more and more Americans are putting off care to avoid costly bills. Add in record high inflation and we have a perfect (or not-so-perfect) storm preventing access to affordable care. Here’s why that’s harmful:
1. It’s bad for public health and productivity
According to the Centers for Medicare & Medicaid Services, over 18% of the U.S. Gross Domestic Product is allocated to healthcare, amounting to over $12,914 per individual. The indirect expenses linked to preventable chronic diseases, which include impacts on worker productivity and the subsequent burden on national economic performance, could soon surpass $1 trillion annually.
Let’s look at some of the numbers:
- Heart disease in America costs our healthcare system $216 billion per year and causes $147 billion in lost productivity
- The aggregate cost of U.S. cancer care is expected to reach more than $240 billion by 2030.
- Obesity costs the U.S. healthcare system nearly $173 billion a year.
*Source: Centers for Disease Control and Prevention
Effective preventative care can reduce costs later—but affordability concerns disrupt this logic. When the cost of care is too high, people are less likely to seek preventive care and early intervention, which are crucial to maintaining good health and preventing more severe and costly health issues later.
2. The high cost of health is exacerbating and creating an even wider gap in health outcomes
The CDC identifies health disparities as, “preventable differences in the burden of disease, injury, violence, or opportunities to achieve optimal health that are experienced by socially disadvantaged populations.” High-cost healthcare disproportionately affects low-income and historically marginalized populations—who may struggle to afford necessary medical care, resulting in a higher risk of poor health outcomes due to limited access to necessary care and financial barriers.
3. Avoiding care now creates problems for nonprofit hospitals later
When left untreated, benign health problems often lead to chronic, costly diseases. For instance, an undiagnosed and prolonged case of high blood pressure increases the risk of heart failure. When diagnosed early, preventive screenings, lifestyle changes and medication are extremely effective. However, 20.1 million U.S. adults have heart failure. What’s the cost of caring for a patient with heart failure? $10,737 to $17,830 per patient per hospitalization2. That’s why it’s critical for hospitals to take the necessary steps to make care—especially early intervention—more affordable.
While nonprofit hospitals aim to provide accessible healthcare to their communities and patients, sometimes they don’t have the right tools in place to decipher which patients can pay and which patients can’t afford to pay—and need help. This is becoming a major problem.
Here’s why:
- Studies show that up to 75% of accounts that hospitals send to collection agencies could have qualified for financial assistance.
- Millions of Americans face the potential loss of Medicaid coverage this year. The medical field, already grappling with dwindling federal pandemic relief funding and substantial labor costs and shortages, must now address the challenges of losing millions of insured patients, despite the lower rates paid by Medicaid.
- And, when you add in the fact that patients have increasingly been avoiding care, it paints a challenging road ahead for hospitals who will likely see bad debt soar in the years to come.
So, how do we fix this? Nonprofit hospitals should consider updating their Financial Assistance Policies and redesigning the patient experience with Financial Assistance Programs (FAPs)
The current state of most hospital financial assistance programs can be described as overly burdensome (for both patients and hospital staff) and underutilized. As a result, most FA-eligible patients end up with their bills in collections rather than receiving balance discounts according to the policy. The key areas in need of improvement within hospital FAPs include:
- The FAP application form should only request information pertinent to the FAP eligibility determination. Sections that can be removed include inquiries about monthly expenses, retirement account balances, vehicles owned, employer contact information and primary residence value/equity.
- FAP eligibility criteria should be reconsidered. A significant portion of patient payments to hospitals originate from households with income exceeding 400% of the Federal Poverty Guidelines (FPG). The American Hospital Association advises providing free care to patients up to 200% FPG, and a majority of underinsured patients fall within the 200% to 400% FPG range.
- Documentation requirements should also be addressed. Determine the minimal documentation needed to confidently establish a patient’s eligibility for financial assistance. The application process at a local hospital shouldn’t resemble tax filing, as the added burden on patients also translates to increased workload for hospital staff.
Patient- and staff-friendly tools and efficient financial assistance processes are available to help hospitals easily identify and approve eligible patients for financial assistance. In today’s landscape, it’s critical to implement technology that automates the verification of patient eligibility, finds hidden insurance and reduces the time and effort required to process applications. And, when a patient is approved, it’s important for hospitals to make the financial assistance application digital, simple and seamless to find.
The rising trend of patients delaying medical care due to cost is alarming, and hospitals have a big role to play in addressing this issue. When a hospital financial assistance program is well promoted and works as intended, both patient and hospital benefit—leading to less bad debt, more revenue, and greater access to care for patients in need. By promoting financial assistance, redesigning financial assistance programs, and implementing tools that streamline the process, hospitals can help ensure every patient receives the care they need without access being blocked by financial concerns.
