Consumers cite affordability as biggest issue when paying health care bills

Consumers are stressed out not only about the rising cost of health care but also the often-confusing process of determining how much they will actually owe.

“On average, even folks who are insured through some type of employer plan are ultimately paying about 30% to 33% of their health care costs,” said Vincent Tammaro, CFO of the Ohio State University Wexner Medical Center. “I think that is really contributing to a lot of the angst from a patient/consumer standpoint.”

According to the 2024 Healthcare Financial Experience Study from the patient financial engagement platform Cedar:

• Nearly three-quarters of consumers said affordability is the biggest challenge to paying larger health care bills;
• 58% find paying a health care bill to be stressful; and
• 18% can’t understand their health care bills and benefits.

Providers also are feeling the effects of challenging economic conditions, with slower growth and high inflation affecting profit margins. Approximately half of U.S. hospitals finished 2022 with a negative profit margin as higher costs outpaced revenue increases. As a result, some providers have resorted to extreme methods to collect money and stay afloat with razor-thin margins.

Based on the research, Cedar offered three recommendations to address billing concerns:

Pair affordability with flexibility. Consumers want to pay their health care bills, but it is often difficult for them to access financial assistance resources, or they might not fully understand their options. Being there for patients during their financial journey is crucial to help them find the most affordable path — whether Medicaid, financial assistance for high-cost drugs or charity care — to resolve their bills. Providers can do more to give consumers certainty of costs and flexibility in payment options, with upfront guarantees, personalized discounts and payment plans.

Find opportunities for collaboration. Consumers need consolidated billing information that is clear about both health care costs and insurance benefits so they can easily understand what they owe. However, access to this information often is blocked by strained payer-provider relationships and fears about opening up access to data and communication channels. The most successful collaborations are when payers and providers start small and pick one pain point to address. By starting with one problem, such as HSA utilization, payers and providers can start to build the muscle for effective partnership while also addressing low-hanging fruit that improves the financial experience.

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Make a lasting impression. The health care experience doesn’t end after the point of care. When patients leave the hospital, they interact with a set of stakeholders beyond the provider’s control, and a bad billing or administrative experience can negatively affect outcomes for everyone involved. Last impressions are lasting impressions, and resolving a bill should feel more like a friendly “see you later” than a hostile break-up, helping to build consumer engagement and brand loyalty.

“We have to get providers and payers working together better,” said James Rohrbaugh, CFO and treasurer of the Allegheny Health Network in Pittsburgh. “It’s not fair to the consumer to be in the middle of this at their most vulnerable moment.”