In our last discussion, we outlined some of the sources of cash. The first was the patient. Only a decade ago, most patients relied on their insurance, employers or government programs to pay their healthcare bills. Providers got paid and didn’t have to inform patients of their charges and fees.
This has changed dramatically over the past decade and the changes are increasing rapidly. These are some of the changes that must be monitored and evaluated since they will require that all providers get paid UP FRONT.
- Premiums are increasing and causing a number of patients to shop for coverage and electing not to be covered by insurance at all.
- Deductibles are increasing. The amount that the insured must pay out-of-pocket before the health insurer pays its share.
- Co-payment: A co-payment must be paid each time a particular service is obtained.
- Coinsurance: Instead of, or in addition to, paying a fixed amount up front (a co-payment), the co-insurance is a percentage of the total cost that insured person may also pay, prior to the services being rendered.
- Exclusions: Not all services are covered.
- Coverage limits: Some health insurance policies only pay for health care up to a certain dollar amount. policy-holder must pay all remaining costs.
- Out-of-pocket maxima: Similar to coverage limits, except that in this case, the Insured person’s payment obligation ends when they reach the out-of-pocket maximum.
- Capitation: An amount paid by an insurer to a health care provider, for which the provider agrees to treat all members of the insurer. This too is changing since insurers may segment the members into different risk categories.
- Out of Network Providers are not covered. Often the patient may not know who is in and out of network prior to the procedure or service and they are often surprised to receive bills for these services after and may not be able to pay them.
- Prior Authorization: A certification or authorization that an insurer provides prior to the medical service occurring.
The message is that all providers must understand who is paying the bill prior to the service or procedure and plan to have many patients not be able to pay their bills. This means that they must calculate the impact on cash flow and set up programs that will enable the patient to pay and not be surprised.
This is no different than any other service but it is new to the healthcare markets and often ignored to the detriment of the patient, provider and the overall hea