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Care, not collections, in a high deductible world.

In 2016, 42 percent of people polled in a national survey said they had spent all or most of their personal savings on health care costs.1 26 percent said health care costs had caused a serious financial problem for their family. The survey, as conducted by National Public Radio, The Robert Wood Johnson Foundation and Harvard’s T.H. Chan School of Public Health, reinforces a fact both individuals and healthcare providers feel on a daily basis: managing healthcare costs is becoming increasingly difficult for consumers. Rising deductibles and high-deductible health plans (HDHP) are putting extra strain on patients. As a result, many healthcare systems — and their cash flows — are feeling the pressure as well.

As consumers look for places to cut expenses, they often start with their healthcare premium. They’re willing to commit to a higher deductible — and cover more of their healthcare costs from out of pocket — in exchange for a lower premium. Between 2005 and 2011, the number of HDHPs grew tenfold, according to America’s Health Insurance Plan Center for Policy and Research.2 And, as interest in HDHP plans has grown, the deductibles themselves have also increased. The Kaiser Family Foundation reports that employee deductibles grew by 255 percent from 2006 to 2015.HDHPs are especially attractive for healthy individuals who are unlikely to need significant care.

As long as policy holders remain healthy, HDHPs make good financial sense. However, when injury and illness strike, the financial burden patients are saddled with can drive them to bankruptcy. Remember the 26% who said they faced significant financial stress due to health care? 7% of that group also said they declared bankruptcy. The reality is, the average person seeking care may not be prepared to take on the expenses that accompany an HDHP.

To avoid the stress of bills they cannot afford, some patients choose to forgo care altogether. According to the NPR/Robert Wood Johnson/Harvard poll, 15 percent of people said they struggled to get the care they needed, and 58 percent said it was due to financial difficulty. Then, 19 percent of people said they did not refill a prescription because of the cost. Choosing to forego care can cause more serious problems that put the person in medical distress, ultimately increasing financial hardship.

When people can’t pay, healthcare providers often feel the pinch. It is difficult to maintain daily operations while feeling the pressure of cash flow complications. Unfortunately, hospitals seem to have little recourse for recouping their accounts receivable. And no provider wants to send their patient to collections, especially under stringent and changing regulations. This has motivated a growing number of hospitals to look for a way to help patients get the care they need, without sending their patients deep into debt.

Mercy, a non-profit health organization, sought to explore a more compassionate alternative to billing and collections. Together with Commerce Bank, they’ve established an innovative patient lending program that allows patients to resolve their balance with a zero-percent (0%) interest loan they can pay back over time. They can also arrange for this before they receive care. "A zero-interest line of credit is not a product you find many places," says Bruce Fernandez, Mercy’s director of treasury services. "But Commerce understood patient needs and developed a truly humanitarian solution that helps ease their minds and support their recovery." An increasing number of healthcare providers are employing options like this, in addition to providing upfront cost information to help patients make more informed health and financial decisions.

Rethinking the traditional treat-first-pay-later model helps alleviate some of the pressure to pay large amounts right away. It allows patients to set up monthly payment plans to pay their medical bills, at a more budget-friendly rate. Gibson Area Hospital & Health Services is another provider that has taken advantage of the Health Services Financing (HSF®) program, offered by Commerce Bank. John Currier, Executive Director of Revenue Cycle at Gibson Area Hospital, says it has allowed them "to help people get out of debt when it comes to their health care bill." By approaching healthcare financing in a different way, organizations like Mercy and Gibson Area Hospital are empowering patients to make informed decisions about their health and finances.

"It really is a stress relief for patients," says Rob Schmitt, CEO of Gibson Area Hospital & Health Services. With the new approach, patients and providers can resolve financial matters and focus on what really matters: good health.


1 "Patients’ Perspectives on Health Care in the United States", NPR, Robert Wood Johnson Foundation, Harvard T.H. Chan School of Public Health as published in “Medical Bills Still Take a Big Toll, Even with Insurance”, Alison Kodjak, National Public Radio,
2 "2015 Census of Health Savings Account – High Deductible Health Plans", AHIP Center for Policy and Research, November 2015,
3 "2015 Employer Health Benefits Survey", The Henry J. Kaiser Family Foundation, September 22, 2015,
4 NPR/Robert Wood Johnson/Harvard survey

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