Study: 2 in 3 patients don’t pay their hospital bills in full

calculator
The percentage of patients with hospital bills of $500 or less who didn’t pay off the full balance in 2016 increased significantly over 2015.

ORLANDO, Fla.—Nearly 70% of patients with hospital bills of $500 or less didn’t pay off the full balance in 2016, according to a new report released today during the Healthcare Financial Management Association’s Annual National Institute.

That’s a significant increase over the percentage of patients who didn’t pay their hospital bills in full in 2015 (53%) and 2014 (49%), the TransUnion Healthcare analysis found.

Other findings on payment patterns between 2014 and 2016 include:

  • 63% of hospital bills were $500 or less; of those hospital bills, 68% were not paid in full in 2016.
  • 4% of hospital bills were $3,000 or more; of those hospital bills, 99% were not paid in full in 2016.
  • 10% of hospital bills were $500 to $1,000; of those bills 85% were not paid in full in 2016.

“There are many reasons why more patients are struggling to make their healthcare payments in full, the most prominent of which are higher deductibles and the increase in patient responsibility from 10% to 30% over the last few years,” said Jonathan Wiik, author of the book “Healthcare Revolution: The Patient is the New Payer” and the principal for healthcare revenue cycle management at TransUnion, in an announcement.

“This shift in healthcare payments has been taking place for well over a decade, but we are seeing more pronounced changes in how hospital bills are paid during just the last few years.”

RELATED: How payers are building better relationships with their network physicians [Fierce exclusive]

And given the rise in healthcare costs and high-deductible health plans, the trend will only continue, he said. Indeed, the report projects that by the year 2020, the percentage of patients not paying their bills in full will rise to 95%. Furthermore, the study found that the percentage of patients who have made partial payments toward their hospital bills has gone down dramatically from 89%-90% in 2015-2016 to 77% in 2016.

“Higher deductibles and the increase in patient responsibility are causing a decrease in patient payments to providers for patient care services rendered,” John Yount, vice president for healthcare products at TransUnion, said in the announcement. “While uncompensated care has declined, it appears to be primarily due to the increased number of individuals with Medicaid and commercial insurance coverage.”

Despite the decline in uncompensated care, in 2015 hospitals wrote off approximately $35.7 billion as bad debt or charity care. 

To address this growing problem, more hospitals are setting up programs to get patients to pay their portion of the bill in advance of a procedure. These initiatives include early payment plans as well as zero-interest, longer repayment options.

To learn more about successful upfront collection programs, join FierceHealthcare on July 12 for a free webinar on revenue cycle collection strategies featuring Sarah Knodel, system vice president of revenue cycle at Baylor Scott & White Health, and April York, senior director of acute patient financial services at Novant Health.