The healthcare industry has been slow to provide accessible information on the cost of services; this has been true for insured and uninsured patients alike.  As health care costs continue to escalate, even insured patients are feeling the burden of out of pocket costs associated with healthcare services.  However, healthcare providers have not developed effective systems or processes to capture true costs and provide patients with information on the out of pocket expenses they will incur for services.  This has put both providers and patients at peril.  For individual consumers, the fact that medical events are usually unexpected makes it difficult to plan for them.

Out of pocket health costs have been increasing at a rate similar to the increase in health care costs since the 1990s.  As health inflation has far outstripped the consumer price index (CPI), many families have been burdened by out of pocket costs for health care.  Research has illustrated that out of pocket expenses are increasing most rapidly among families where all (non-elderly) members have insurance coverage throughout the year.  While families with uninsured members face high out of pocket costs, families with coverage for the entire year have experienced the largest proportional increase in these costs.   In families where there is someone with a health problem, or ongoing health need, there is an even greater likelihood that they will face high out of pocket costs.  Those families buying insurance coverage directly in the non-group or small group market face even higher out of pocket expenses. 

For providers, the problem of treating patients with inadequate insurance coverage is increasingly hitting their bottom line.  Many of the publicly held health systems and hospital chains report increasing bad debt that is fueled by underinsured patients.  Some providers complain that insurers have intentionally shifted costs through high deductibles and co-insurance and that they, not the provider, should collect those charges from the patient rather than have providers should the financial risk.  

Providers and consumers have also voiced concerns about insurance company practices that shift costs in less obvious ways.  An example would be the insurance company practice of basing reimbursement on usual and customary fees charged by providers.  Some feel that this practice yields lower insurance reimbursement for providers and high out of pocket costs for patients.  NY State AG Andrew Cuomo recently announced an investigation into Ingenix, the country’s largest provider of healthcare billing information.  Ingenix information is used by insurers to determine the rate of reimbursement for services received out of network.  AG Cuomo is charging that Ingenix data are inaccurate and result in patients absorbing higher out of pocket costs. 

• How do providers increase their ability to predict revenue flows and how valuable is predictability?
• What would providers trade off for predictability of revenue?
• What is the actual impact of high deductible plans on receivables?  Can we look at trends?
• What are barriers between Providers and Patients in understanding of Out of Pocket Expenses?
• What percentage of patients who had out of pocket costs knew they would and what percentage of those were reasonably able to predict what those would be?  What are the demographics of these people?
• What specific market based practices are being used to move to increase predictability?
• How much unpredictability is caused by variability in Provider (i.e. Doctor) decision making?  Is this doctor variability highly correlated with a doctor’s experience level or is it something harder to quantify?
• How much unpredictability is caused by variability in Provider (i.e. Doctor) decision making?  Is this doctor variability highly correlated with a doctor’s experience level or is it something harder to quantify?
• What is the breakdown the HU by level of costs?  (For example, what portion are bills totaling less than $1K, $1-5K, more than $5K) For what type of care (chronic care, episodic, primary/preventive)?

• Sliding scale progressive pricing models
• Payment schedules
• Common billing system
• Financial planning
• Revenue cycle management firms