Consumers do not have control over their medical costs or the billing process and they don’t like it.  According to a study conducted by Cedar (a financial technology platform):

• 31% of consumers are not satisfied with the coordination between their healthcare provider and payer;
• 40% are not satisfied with provider billing;
• 93% of consumers say the quality of the financial experience is an important factor in their decision to return to a healthcare provider; and
• 37% of consumers won’t pay a bill if they cannot understand the administrative experience.

Consumers want to know how much they will be charged, they want the charge to be fair, and they want the payment process to be easy. Many (37% according to the Cedar study) will not pay unless these requests are met.

Consumers have less incentive to blindly pay with the changing credit reporting rules. By the first half of 2023, Equifax, Experian and TransUnion will no longer include medical collection debt under $500 on credit reports. The Consumer Financial Protection Bureau is evaluating the elimination of reporting any medical debt and has called medical debt for what it is:

In many ways, it’s hard to call medical debt a real debt. Few people choose to take on medical debt, and typically, patients have no idea how much they will be charged for a service or a procedure. There’s no upfront disclosure or interest rate to compare. Individuals and families must confront a billing and collections system that can be best described as error-plagued, confusing, and labyrinthine.

Taking away the power of providers to coerce consumers into payment is one step in giving consumers control over their healthcare costs. While consumer non-payment may be a grass-roots way of effectuating control and cost reduction, it is not likely the best or most sustainable method.

What is a consumer to do? Plan, not react.

Consumers need to shift their thinking about healthcare. For many years, consumers have been too far removed from the payment process. The consumer doesn’t know how much the services will cost until after they are performed, when the consumer receives their Explanation of Benefits showing the breakdown or their bill. Most consumers will only be concerned with the patient responsibility portion of the bill, likely ignoring the original charges or the total allowed amount (patient responsibility plus plan payment). The consumer needs to care about the total cost because it ultimately affects them through rising premiums and higher deductibles and copays. Like with other purchases, consumers need to become part of the process – not be removed from the process.

Second, consumers need access to tools (with human support) that simplify the healthcare process from selection of a provider to payment. While consumers may not be able to control an emergency situation, they can be provided the tools and support to be actively involved with nearly every other healthcare decision. For example, they could be guided to higher quality healthcare providers leading to better outcomes and an overall reduced cost. They can also be provided advocacy services to assist with payment (and payment disputes). The most important factors are that the tools are simple, user friendly, and supported by actual people they can reach out to.

Finally, consumers (and their employers) need to be open to new (or underutilized) ideas in healthcare cost containment that are different than how they are currently receiving care or how their current insurance plan works. A few such ideas are:

• Traveling to higher quality providers for medical care;
• Using remote healthcare services, such as telehealth;
• Accepting reference-based pricing as a healthcare insurance model; and
• Broader adoption of HSAs.

The Cedar study shows that consumers are not happy. Providers are not going to make the process more transparent (in fact, they are actively failing to comply with legislation requiring them to do so). With continued innovation, greater consumer involvement and consumer support, this could change.