The health insurance landscape is shifting, as patients in greater numbers shop the open market for coverage, and take on a larger portion of the cost of the care. Hospitals would be wise to ask themselves some pointed questions during this transition, or risk getting shut out of narrow networks, saddled with bad debt and poorly portrayed in competitive markets.
That’s the gist of a new report, just released by the American Hospital Association. As the price of providing health insurance continues to rise, employers are pushing more of the cost of care onto their workers. The number of employees required to pay coinsurance (a percentage of the costs of health care services incurred, rather than a fixed copay) for a hospital admission has increased to 61 percent last year from 37 percent in 2008, , according to the AHA “TrendWatch” report.
Plus, the number of enrollees with high deductible health plans — at least $1,250 each year for an individual, doubled for family coverage — also has grown in recent years. Just 4 percent of the employer-based health insurance population used such plans in 2006, a number that ballooned to 20 percent as of last year.
All this means that consumers are shopping around to try to find the doctor and hospital providing the best care, at the lowest price, and organizations would be wise to provide information that allows them to make that decision.
For detailed info on improving price transparency, the AHA nudges readers toward another guide, which was produced by a committee of stakeholders convened by the Healthcare Financial Management Association. Hospitals & Health Networks also explores the topic in-depth in our June cover story penned by contributing writer Lola Butcher.
With the increased financial burden placed in the hands of health care consumers, hospital leaders need to watch out for a slew of problems that might arise. Some 32 percent of the privately insured may skip care because of the price, the report points out, leading to an increased chance of high-acuity visits down the line. Plus, there’s a greater chance of hospitals incurring bad debt because of those higher out-of-pocket costs. For that reason, Moody’s investor service downgraded its financial outlook for nonprofit hospitals this year, the report notes.
Narrow networks, limiting patients to a certain group of doctors and hospitals, are another trend worth watching. In 20 large urban areas, about 38 percent of networks included in Affordable Care Act health plans are narrow, with 30 to 69 percent of area hospitals included in the network. Another 38 percent are defined as “ultra narrow,” allowing patients to visit fewer than 30 percent of area hospitals. This can especially pose problems for patients with rare conditions who need to visit highly specialized doctors.
The AHA offers five areas of strategic focus that hospitals should consider in addressing this new environment:
- Engaging patients in selecting a health plan.
- Making price and quality data available.
- Reviewing network contracting strategy.
- Evaluating branding and value to networks.
- Aligning with local policies and the legal environment.
How are you responding to the shifting insurance landscape? Share your thoughts through Twitter or in the comment section below.