bad_debt_vs_high_deductible-smallThe pace of change in the healthcare industry is accelerating rapidly. Higher expectations by patients for quality, cost, and transparency reflect our consumer-centric economy.

One of the most significant changes impacting healthcare providers is the shift from third-party payers to patient responsibility. According to America’s Health Insurance Plans (AHIP), the growth in High Deductible Health Plans (HDHP) is a major contributor to out-of-pocket payments for insured patients increasing 68 percent in the past five years.

According to a Moody’s Investor Service report in March of 2014, HDHPs are responsible for an increasing share of patient bad debt expense. Exhibit 1 charts the growth in bad debt and incidence of HDHPs from 2009 through 2013.

Another growing challenge for providers results from health insurers denying claims for members who have not paid their premium for plans bought through healthcare exchanges. Responsibility shifts to patients during lapses in coverage due to delinquent premium payments.

This shift in payment responsibility from large healthcare insurers to individual healthcare consumers is out-pacing most healthcare providers’ abilities to make essential adjustments.
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