The size of out-of-pocket costs may come as a shock to many Americans. But among healthcare executives, it's no surprise. “We don't want economics to be a barrier to appropriate care,” said Michael Blaszyk, senior vice president and chief financial officer for Dignity Health, who expects a large number of newly insured people will buy plans that leave them vulnerable to hefty out-of-pocket costs. For example, bronze-tier plans cover only 60% of costs, while silver-tier plans, which are expected to be the most popular plans inside and outside the exchanges, cover 70% of costs.
Patients will need help to pay that debt, Blaszyk said. “We are examining different alternatives.”
The Palomar Medical Center in Escondido, Calif., introduced a two-year financing option just before the recession, but that left many patients with $200-a-month payments. “That can be a lot for many incomes,” said Cynthia Burns, the medical center's manager of patient access.
So Palomar switched to six-year loans that can be refinanced at any point to reset the clock. The loans carry no interest, which the hospital absorbs, she said.
Two years ago, Florida Hospital in Orlando began to offer patients bank-financed loans to settle balances that the hospital sought to collect before patients arrive or as they leave. Increasingly, patients cannot afford the bills, said Bonnie Hache, the hospital's administrative director of patient access.
In Pennsylvania, Hanover Hospital made local headlines in 2010 after the 10% interest rate for its patient loan program caused backlash, the Evening Sun newspaper reported. In response, the hospital slashed the rate to 3.9%. Officials with Hanover Hospital did not respond to requests for comment.
Officials at health systems and hospitals that recently launched loan programs said banks agree to adhere to billing and collection policies and return delinquent accounts to the healthcare provider for collection.
Patients with private insurance have seen their share of healthcare costs grow in recent years as employers shift their employees into health plans with higher deductibles, copayments and coinsurance. One-third of those insured through a job have a deductible of $1,000 or more, the Kaiser Family Foundation said last month.
As the amount patients owe has climbed, hospital collection efforts have become more aggressive and sophisticated, including new financing options such as hospital loans and attempts to settle bills before or during patients' hospital visits. Those practices have invited renewed scrutiny of hospital billing.
The Patient Protection and Affordable Care Act will cap maximum out-of-pocket payments for insured patients, but at an amount that may still strain budgets: roughly $6,300 for individuals and $12,700 for families for all but the low-income, who will see caps reduced.
At Dignity Health, Blaszyk said his organization is considering ways to develop patient loans that create access to credit at low interest rates, regardless of patients' credit scores. The health system would back the loans, he said, essentially extending its credit strength to a line of credit for patients.
Dignity currently uses its own cash to finance a long-term, zero-interest repayment plan. An influx of newly insured patients who need credit would tie up more cash, which the system could better use elsewhere. Developing its own low-interest loan program may allow Dignity to avoid new contracts with collection companies, he said.