A recent article from Forbes Magazine pointed out that Community Health Systems, one of the largest hospital chains in the country, had surprised investors by deciding to write off $169 million in bad debt. This is one of the most recent examples of a growing problem that is leaving many medical companies wondering how they are ever going to get paid.
Most, if not all, of that $169 in bad debt is comprised of “lower-than-expected collections on deductibles,” which means that medical companies are having a more difficult time than ever getting paid by the very people they treat. Two of the biggest reasons for this phenomenon are the still-struggling economy and the recent shift to higher deductible insurance offerings under ObamaCare.
The Still-Struggling Economy
Einstein would have loved studying the recent economic recovery, because it’s all relative. Depending on where you live and what industry you earn a living from, you might have seen things get a whole lot better over the past few years…or you might not have noticed anything.
There are still many pockets of the country where people are having trouble making ends meet and working for near-minimum wages. When an unexpected medical bill is added into the budgets in these parts of the country, the fragility of those budgets suddenly becomes very clear.
High Deductible Insurance
The reasons that so many unexpected medical bills are being introduced into the budgets of families across the country is that many families have transitioned to higher deductible insurance in recent years. These types of plans are promoted under ObamaCare because of their affordability, but consumers are now learning that you often get what you pay for.
With four-figure deductibles for even the most common procedures, many consumers are blindsided by the size of the bills they encounter following common procedures like hip replacements. The bills that take consumers by surprise are often the ones that go unpaid.
Changing the Status Quo
At the rate we are going, many of the best medical practices are simply not going to survive much longer. There is only so long that you can continue to operate without being compensated for your work. In order to keep their doors open, medical facilities are going to have to change the way that they conduct their businesses.
One of the simplest ways that they can do this is to expect patients to make payments either before or immediately after a procedure. Allowing too much time between the procedure and the first bill arriving makes it a whole lot easier for consumers to minimize the value of the service they received.
Another thing that many medical practices are doing to ensure that they at least get something for their services is to send delinquent account to collections much sooner than they have in the past. Time is the biggest factor in debt collection, so the sooner a competent agency gets the information, the more likely they will be to actually collect on the debt.
Bringing in a debt collection agency as soon as possible also offers the benefit of allowing medical companies to focus on what they do best: helping people. Taking the stress of collecting from past patients off of their plate frees up more time to dedicate to their current patients.
No matter where you live or what industry you earn a living from, the burden that rising medical debt is placing on the average consumer is sure to have a negative impact on the overall economy in the coming years. Luckily, many smart medical facilities are doing everything they can to get out ahead of this problem before it is too late.