Hospitals in Northern New Jersey (and no doubt elsewhere) are a lot more likely these days to collect patient payments upfront rather than waiting to bill and collect later. Although it sounds a bit cold-hearted, it’s not a bad idea if done properly. In particular if a hospital can determine upfront what a patient’s co-pay or deductible is, it’s reasonable to try to collect it when the patient is there. That avoids the substantial costs of collection and dramatically boosts the percentage of patients who pay. In theory it may also lower the rates a hospital can accept from insurance companies, which ultimately could translate to lower premiums when there is less cost shifting from those who don’t pay to those who do.
As I write this I’m well aware of the problems such a policy can cause including deterring people from needed care, increasing anxiety at a time of heightened stress, delaying clinical triage, and getting the amounts owed wrong. The biggest issue is the first one –for example even an insured patient may not have the $1000 or $2000 co-payment or deductible on hand. But that also shouldn’t necessarily be the hospital’s problem. Rather that’s an issue for the plan sponsor (often an employer), state or federal policy.
I do worry about big institutions such as hospitals acting inappropriately aggressively toward patients, but this problem already exists with post-treatment payments. If anything, taking care of the bill up front may reduce the interest and fees that can pile up, especially when a collection agency gets involved.January 25, 2012