Why the insurance company wants to tell patients how much they owe the doctor

BlueCross BlueShield of South Carolina is rolling out a service that tells patients how much insurance will cover and how much is the patient’s responsibility –right at the point of care. (For Patients, This Is a Virtue: A System to Tally Doctor’s Bills, Wall Street Journal.)

What’s BCBS’s motive, other than promoting goodwill?

Doctors have a hard time collecting patient balances. It’s costly to bill and patients don’t always take the bills seriously. Letting the patient know his balance while he’s still in the office should help doctors increase collections and reduce collection costs. With ever higher co-pays and deductibles, patient pay represents an increasing share of physician office revenues.

BCBS is indirectly helping physicians increase their revenues. As a result, BCBS wil be in a better position to hold down reimbursement rates to its physicians and thereby justify its investment in the new service.

July 28, 2005

One thought on “Why the insurance company wants to tell patients how much they owe the doctor”

  1. .
    What’s BCBS’s motive, other than promoting goodwill?

    Sorry, David, but there is no such thing as “goodwill” where insurers are concerned.

    I agree that at least a part of the motivation is the long-term view that this may help hold down reimbursement rates.

    But insurers aren’t all that interested in long-term solutions, either.

    When in doubt, always follow the $$$. In this case, I’d bet that the primary motivation is to put the onus of high healthcare (and thus health insurance) costs onto the provider. How many folks actually read the EOB, as opposed to skipping to the “bottom line” of how much they owe? Not very many.

    This way, the insured/patient has immediate feedback of how much their care costs, and any resentment of such flows to the provider, not the insurer.

    Now, there may be an alternate (or additional) rationale, as well: with the ever-increasing population of folks with HSA/HRA plans, this may be a way to empower folks with such plans to negotiate a lower price for the service. Of course, that lowers the insurer’s exposure, too.

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