In a startling shift in the American healthcare landscape, The Guardian is reporting that the majority of debtors to US hospitals are now people with health insurance. This marks a significant departure from just a few years ago.

Colleen Hall, senior vice-president for Kodiak Solutions, highlights this change, stating, “We always used to consider bad debt... those [patients] that have the ability to pay but don’t.” However, the reality today is starkly different. Today's out-of-pocket costs are often beyond what many insured patients can afford.

Houston, we have a problem
Just 5-6 years ago, only 11.1% of hospitals' bad debt was attributable to insured patients.

In 2022, that number hit a staggering 57.6%!

Given that financial wellness has been a staple of employee well-being for several years now, it's no surprise that medical debt is a significant factor driving decreased productivity, increased stress, and higher turnover rates.

For health management and point solution vendors, their aim to improve both individual and collective health is being challenged by this dynamic because it tends to confound their efforts to get more employees to participate in their programs!

Avoiding care increases risks - and costs
The financial strain of medical debt can not only deter employees from seeking necessary healthcare (which impacts their overall health), but it too often keeps more of them at the "contemplation" stage of change.

Matt Szaflarski of Kodiak Solutions notes that healthcare providers are increasingly becoming debt collectors, too. This dynamic further complicates the relationship between patients, providers, and employer health plans.

How high can deductibles and out-of-pockets go?
It's not just that cost-shifting to employees is increasingly untenable, it's that just trying to figure out increasingly complex bills and EOBs are, themselves, stressors. And they're also adding unnecessary (and avoidable) administrative costs into the equation.

But are we really re-evaluating health plan designs and employee support systems? Or are we defaulting to "we're doing all we can." Really?

The last word
Cost-shifting has been a core strategy for at least going back to when I was a consultant/broker myself (i.e. the 90s).

When it comes to getting employees to play their appropriate role by participating in the employer's health management programs - it ain't workin'.

Employees - like all of us - are humans, first. And they need - and I believe they want - whole-health functioning and lived experiences.

If we keep up the cost-shifting, maybe we can at least give them some bootstraps, too.

~ Mark Head
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