I remember getting insurance when I first started working in the collection industry 13 years ago. I was in my early 20’s, and didn’t really value the coverage because I felt invincible as we all do at that age. However, I signed up for full coverage because it was so cheap. I had medical, dental and vision for a whopping $89 dollars per month. I stayed with the same company for 13 years, and each year we would all pile into the manager’s office and listen to the corporate benefits coordinator try to explain why benefit costs were increasing another 10% each year. They could have saved time and money by just recording the first one and replaying it every year. By the time I left the company, my insurance cost had increased to $600 per month. Much had changed for me personally in those 13 years. I now had a family, thus family coverage opposed to the individual coverage. But, healthcare coverage certainly represented the largest cost of my disposable income. I know I’m not alone. The evolution of insurance coverage has been forced to change in order to deal with 10% coverage hikes each year. Let look at some ways insurance companies are accomplishing this feat.
1. High deductible Plans- patients are now obligated to pay more out of pocket.
2. Larger Co- Insurance Plans- opposed to the standard 80/20, plans are being adjusted to
70/30 and in some cases 60/40.
3. Higher Co- Payments- No explanation needed.
How does this affect a medical practice and their resources? These changes have pushed medical collectibles on their patients to unprecedented levels. Many practices are now in a situation where their patients’ balances comprise of 30% of the overall revenue. This is up from 10% to 12% only five short years ago. We can only guess as to how much this will increase from 30% in the upcoming years. But, in general the past is a good predictor of the future. It is vital that medical practices implement policies and processes that prepare them for the worst. Every change made in Congress concerning Healthcare Reform will have an impact on your medical collectibles.