Are You One Hospitalization Away From Bankruptcy?

The majority of Americans can no longer afford their medical care. One in four U.S. families struggled to pay medical bills in 2012. One in 10 said they had costs they couldn’t pay at all, according to a survey from the National Center for Health Statistics.

hospital visit 200x300 Are You One Hospitalization Away From Bankruptcy? Photo

Medical bills are the number one reason people file for bankruptcy.

Out of control health care costs are hurting families and driving millions into bankruptcy – 60 percent of people who file for protection do so because of medical bills.

Politics aside, there’s no denying something needs to be done.

The Affordable Care Act is an admirable step towards offering coverage to people who previously didn’t have insurance. Yet, many Americans will purchase high-deductible plans that will put them in financial jeopardy. In fact, the majority of people with medical debt cite unaffordable co-payments and deductibles.

According to a Kaiser Family Foundation report, when out-of-pocket medical bills exceed 5 percent of income, people are twice as likely to have trouble making ends meet. That’s only $2,500 for the average household making $51,000. Cost-sharing liability under most private health insurance plans today exceeds this level. Based on this benchmark, most Americans are just one hospitalization away from the bill collector.

How prevalent are high-deductible plans? About 17 percent of employers offered the plans as their only option in 2013, and 44 percent of employers are considering offering high-deductible health plans as the only benefit option to their employees in 2014.

The biggest obstacle in controlling costs is the lack of marketplace economics in health care. Of course, no one plans a medical crisis. But there are ways to mitigate costs with the same tools that help consumers purchase cars and flights.

Next generation online transparency tools can show consumers where cost and quality intersect. Similar to purchasing a car or airplane tickets, consumers can compare prices, quality metrics, even read reviews from patients.

These tools help people find the best care at the lowest price. For instance, a consumer can save thousands by opting to get an MRI at an imaging center rather than at their hospital. That’s a difference your doctor may not discuss – or even know about – when he asks where you prefer to have a procedure done.

Complexity in health care pricing is a product of cost negotiations. Insurers work with providers to set prices for each plan. That means two people getting the same procedure at the same hospital can tally up vastly different bills.

The trick is being able to get the best value. Health insurers have a vested interest in helping members make that a reality. Today, many plans are implementing cost estimator tools – but members have been slow on the uptake. Only 2 percent of patient members said they use cost calculators offered by their health plans, reported a survey from Catalyst for Payment Reform.

Better user experiences and quality data will strengthen the usability of transparency tools. Higher prices will spur the adoption. It won’t be long before people check on the cost of a colonoscopy or ask the price of a blood test.  Cost- shopping will become the norm. We can’t afford the alternative.