New insights from TransUnion Healthcare emphasize patients’ need and desire for greater price transparency in wake of COVID-19 pandemic
The changes brought on by the COVID-19 pandemic are leading to more healthcare consumerism, where patients are taking their medical care and the costs associated with it into their own hands. TransUnion Healthcare’s (NYSE: TRU) second annual patient survey found that nearly six in 10 patients (59%) deferred non-COVID-19 related medical care during the past six months.
TransUnion Healthcare surveyed more than 3,000 people in September 2020 who had either visited a hospital, healthcare clinic, doctor’s office or other healthcare organization for treatment during the past 12 months. In addition to the changes that the pandemic has brought to the healthcare industry, nearly half of survey respondents (49%) indicated that the state of the economy has at least some impact on how they seek medical care. This number was a seven basis-point increase from 2019.
“Healthcare consumerism is growing, perhaps in part due to the economic and financial challenges resulting from the COVID-19 pandemic,” said David Wojczynski, President of TransUnion Healthcare. “Our latest survey illustrates to providers just how important it is to offer flexible care delivery options and payment experiences for their patients during this period of uncertainty, as well as understand and address individual payment needs.”
Healthcare consumerism driven by younger generations; spurred by economic challenges
Findings throughout the survey highlighted that the youngest generations are feeling the greatest impact from the COVID-19 pandemic. In fact, one-third (33%) of Gen Z and 29% of Millennial patients reported their health insurance coverage was impacted due to the pandemic (compared to 22% of overall respondents; 18% of Gen X; and 12% of Baby Boomers).
“Our survey found, due to the pandemic, larger percentages of younger generations deferred non-essential care and had their insurance coverage impacted. At the same time, the industry has reported only modest shifts in payer mix despite the economic and financial impacting these individuals, going against expectations and signifying a gap in coverage,” said Jonathan Wiik, principal of healthcare strategy at TransUnion Healthcare. “These findings indicate that while a greater percentage of these patients lost health insurance coverage due to the pandemic, the moderate change in payer mix could be because they avoided non-essential care and likely did not seek alternative coverage.”
Interestingly, an updated TransUnion analysis indicates that while patient out-of-pocket (OOP) expenses in 2020 remain near their highest levels across all care settings, the overall change in OOP costs is limited when compared to 2019 levels (inpatient down 5% year-over-year to $5,002; outpatient up 6% year-over-year to $1,095; and emergency department down 7% year-over-year to $485). Given these minimal changes, patients’ focus on understanding costs prior to service and the growth in consumerism appear to be driven by the material, financial impacts of the pandemic and insurance plan disruptions.
Supporting the increasing trend of healthcare consumerism, TransUnion Healthcare’s survey also found eighty percent of respondents utilized either healthcare provider or payer/insurance websites, among other sources, to research healthcare costs – up from 75% in 2019. Younger generations are more likely to be researching these costs compared to older generations (90% of Gen Z respondents and 87% of Millennial respondents compared to 69% of Baby Boomer respondents).
What’s more, the desire for a clear understanding of healthcare costs has a direct impact on healthcare providers. Forty-seven percent of recent patients chose their healthcare provider based on cost.
Youngest Generations Driving Healthcare Consumerism amid COVID-19 Challenges
|Generations*||All||Gen Z||Millennials||Gen X||Baby Boomers|
|Percent of Patients That Indicated The State of The Economy Has an Impact on How They Seek Medical Care||49%||67%||55%||51%||30%|
|Percent of Patients That Had Their Health Insurance Impacted Due to COVID-19||22%||33%||29%||18%||12%|
|Percent of Patients Conducting Some Form of Research on Healthcare Costs||80%||90%||87%||79%||69%|
|Percent of Patients That Chose Their Healthcare Provider Based on Cost||47%||59%||55%||45%||36%|
|Percent of Patients That Fully Understood Their Financial Responsibility for Their Recent Medical Bill||52%||37%||47%||55%||64%|
*Gen Z (born 1995 or after); Millennials (1980-1994); Gen X (1965-1979); Baby Boomers (1946-1964).
Price transparency is critical for all stakeholders
With healthcare consumerism taking hold within the industry, price transparency is increasingly more critical for healthcare providers as patients shoulder more of the burden of healthcare costs.
TransUnion Healthcare’s survey revealed that 53% of recent patients received clear cost estimates prior to receiving treatment. While this number is a three basis point year-over-year increase, more may need to be done to educate patients on their healthcare costs and payment options. Only 52% of patients fully understood their financial responsibility for their recent medical bill.
“With its new price transparency rule, CMS is also placing a greater emphasis on having clear, accessible pricing information for consumers before service which ties back to the increasing trend of healthcare consumerism. Healthcare providers will need to comply with the new rule by the January 1, 2021 deadline, and with this date fast approaching, it’s critical for providers to consider our latest findings when implementing approaches to best meet all aspects of the mandate,” said Wiik.
Further, when patients clearly understand their healthcare costs, they are more likely to pay for their treatment. Sixty percent of the patients surveyed are at least somewhat likely to pay their bill upfront if a cost estimate is offered in advance or at the time of service. When given an estimate at the time of service, nearly two-thirds of recent patients (65%) said they would make at least a partial payment.
In addition to offering patient estimates, further considerations that can help healthcare providers drive patient engagement and deliver a more streamlined and positive patient financial experience include creating customized patient payment models and providing financing options that fit patients’ individual needs.
To learn more about TransUnion Healthcare’s second annual patient survey and other information on patient financial experience, click here. Additional tips and best practices that healthcare leaders can implement to be ready for CMS’s price transparency mandate can be found here.
About TransUnion (NYSE: TRU)
TransUnion is a global information and insights company that makes trust possible in the modern economy. We do this by providing a comprehensive picture of each person so they can be reliably and safely represented in the marketplace. As a result, businesses and consumers can transact with confidence and achieve great things. We call this Information for Good.®
TransUnion Healthcare, a wholly owned subsidiary of TransUnion, makes mutual trust possible between patients, providers, and payers by helping them navigate payment uncertainty. Our Revenue Protection® solutions leverage comprehensive data, accurate insights and industry expertise to engage patients early, ensure earned revenue gets paid and optimize payment strategies. TransUnion Healthcare helps over 1,850 hospitals and 550,000 physicians collectively recover more than $1.2 billion annually in revenue.
A leading presence in more than 30 countries across five continents, TransUnion provides solutions that help create economic opportunity, great experiences and personal empowerment for hundreds of millions of people.
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