High-deductible plans drive increased point-of-service collections

The proliferation of high-deductible health plans has dramatically altered healthcare providers' collection process, according to a new survey from The Advisory Board Company presented at its first technology summit.

Health systems and hospitals increased their annual revenue from point-of-service collections more than twice over in the last four fiscal years, in what experts said was largely a reaction to increasing numbers of patients receiving increased financial responsibility for their care.

"This move to collecting payment at or before the point-of-service reflects the industry's experience that as more time passes after care is delivered, a patient's propensity to pay decreases substantially," Christopher Kerns, managing director of research and insights at The Advisory Board Company said in a statement to press.

Between fiscal 2010 and fiscal 2014, the research found, the median point-of-service collection per provider leapt from $0.7 million to $1.8 million. Breaking the numbers down further, providers also saw their median point-of-service revenue per bed increase from $2,660 in 2010, hitting $4,000 in fiscal 2012 and $5,780 in 2013.

The rise of point-of-service collections has the potential to substantially reduce uncompensated care and the resultant bad debt, according to the company. Research found point-of-service revenue collection has grown to a median of 0.57 percent of net patient revenue, rising even higher among top performers to 1.1 percent.

Despite this positive news, prior research indicates high-deductible plans may be a mixed blessing. A study by the National Bureau of Economic Research found the plans drive down use of health services, FierceHealthPayer previously reported, and they may also lead patients to procrastinate on necessary care.

To learn more:
- read the announcement