The true impact of rising health care costs

Nov 24, 2014 | Healthcare Industry News

Patients want their doctors to make them feel better.

While a simple concept, this belief actually has wide-reaching impact on health care costs, and has contributed significantly to rising costs. 

As health care consumers, patients generally have no notion what the real cost of care may be, and have little interest in learning. We simply want to feel better, and for our providers to find a way to make whatever is negatively impacting our wellness stop. 

A recent New York Times article compared the current health care market to an all-you-can-eat buffet. At a buffet, customers are almost encouraged to be wasteful, generously filling their plates, and when that gets cold, to run back and fill it up again. Because buffet customers have already paid a nominal fee, they feel that they need to get their moneys worth — after all, its no longer on their dime. 

Well, eventually, the buffet will need to raise prices to stay in business. In the health care industry, this means rising co-payments and deductibles, and other financial penalties to attempt to reduce inefficient spending. 

The source cited a study published in JAMA last month that called for increased price transparency, to both help patients understand the true cost of their care and help them better understand any out-of-pocket costs. The study found that patients who use cost transparency tools spent 14 percent less for laboratory tests and 13 percent less for CT and M.R.I. scans than those who did not.

While cost transparency is important to help reduce inefficient spending, further action is needed to curb inflating costs. Until then, care facilities can continue to encounter the need for claims management solutions to address bad debt. The decision to outsource receivables management can help reduce the negative impact of bad debt, and avoid challenges with cash flow.