It's never been easy to be a surgical patient. First, there's the anxiety related to undergoing a procedure. Even for routine, outpatient surgical care, there are always safety risks. Then, there are all the other stressful — and sometimes uncomfortable — issues tied to surgery, such as preparation, post-operative side effects, physical therapy and follow-up care, coordinating transportation to and from the facility, taking time off work and arranging for support at home.
But another challenge has recently emerged that has added to this already stressful experience — and for some patients quite greatly: financial responsibility. It wasn't long ago that $50 co-pays and $250 deductibles were commonplace. Now such low figures are rare, if not unheard of.
How concerned are consumers about healthcare costs? According to a Consumers for Quality Care survey, Americans are more worried about these costs along with their increasing financial responsibility than the costs associated with retirement, higher education, housing and child care. Furthermore, Americans are more concerned about premiums, deductibles and co-pays than about access to care or quality of care. And, as the survey notes, that's despite the fact that more people in the United States have health coverage than ever before.
The good news is that these trends and concerns have not gone unnoticed by service providers. In recent years, we've witnessed the emergence of innovative patient financing options developed to provide critical assistance regarding treatment costs.
One option receiving increased attention from and adoption by ambulatory surgery centers (ASCs) is the provision of a secured loan to patients that covers their surgical costs. The model works as follows: When ASCs offer this option and patients choose to take advantage of it, patients receive a loan package designed to meet their budget. After a patient undergoes a procedure(s), the ASC receives a payment covering the patient's balance, with the lender managing collections activities.
The model significantly benefits ASCs as they can more effectively collect higher patient balances and receive payments in an expedited manner. The model also greatly benefits patients — so much so that ASCs offering the option are likely to witness increased patient satisfaction.
Here are 3 of the reasons why.
1. Out-of-pocket costs known in advance. For many patients, even a little uncertainty concerning their financial responsibility for care received is enough to keep them from pursuing treatment. Consider that one survey showed that 90% of consumers want to know their payment responsibility prior to a procedure.
Through this model, patients know exactly how much they will owe for their care prior to treatment. This removes the uncertainty and gives patients the ability to effectively plan for their payments.
2. Removes financial stress. In addition to providing certainty concerning what patients will owe for their care, this model also eliminates the financial stress associated with needing to make a single, large payment to cover a high deductible. Patients can choose a plan designed to help accommodate their ability to pay.
Since payments are made over an extended period, the amounts are smaller and much easier to budget. This can help patients avoid exceeding their credit limit — yet another stress associated with needing to make a substantial payment.
3. Provides an alternative to traditional lenders. Patients faced with looming medical payments have often sought the services of traditional lenders, such as banks, to help them cover expenses. Unfortunately, such an option can prove quite risky.
It is estimated that roughly 40% of patients seeking credit from top healthcare lenders are denied. Applying for a loan can be a difficult, document-intense process. Loan decisions can take a long time, delaying the scheduling of treatment and adding stress. If a loan is approved, it can include pre-payment penalties, post-interest balloon fees and other charges that can rapidly inflate what patients owe. Such loans also tend to have an impact on the borrower's credit.
With the new model, these risks are often avoided. Pre-qualification tends to be a very fast process, with loan decisions usually made instantly without impacting an applicant's credit score. Secured loans typically offer extremely competitive approval rates and, as previously mentioned, low monthly payment options. And since the loan program was developed with surgical patients in mind, options such as loans that cover multiple procedures performed over multiple visits may be available.
Randy Bishop (rbishop@surgicalfunds.com) is a partner with Surgical Funds, which facilitates patient financing solutions to supplement out-of-pocket expenses for ASC procedures.