Patient Share of Medical Costs Soars 22 percent in 2012

The average patient payment responsibility — commonly called out-of-pocket costs — on key medical procedures has grown nearly 22 percent in the last year, increasing from $1,678 in Q4 2011 to $2,042 in Q4 2012, according to a new report from TransUnion Healthcare.

In that same timeframe, the average consumer’s total revolving credit line on products such as bank-issued credit cards, store credit cards and home equity loans has remained essentially flat, dropping from $34,430 to $34,301. This indicates that the share of medical debt for U.S. consumers is growing more rapidly than other debt types.

“Most people understand that healthcare costs have been increasing during the last decade, but TransUnion wanted to specifically take a look at the impact of those costs on the consumer wallet,” said Milton Silva-Craig, President of TransUnion Healthcare. “Hospitals are discovering that data, analytics technology and improved infrastructure are needed to ensure they understand the payment behavior of patients, through a consumer lens, as they strive to better manage their reimbursement processes.”

A ratio comparing available revolving credit to the aforementioned healthcare costs highlights how much more of the consumer wallet is dedicated to making healthcare payments. At the end of 2011, the ratio of total revolving credit line to healthcare costs was 20.5 to 1. In other words, for every $100 in healthcare costs, consumers had $2,050 in revolving credit to make those payments. At the conclusion of 2012, this ratio dropped to 16.8 to 1, or $1,680 in available credit for every $100 in healthcare costs.

“Uncompensated care is one of the biggest issues hospitals face in this new era of healthcare,” said Silva-Craig. ”With more and more people struggling to make payments, healthcare organizations must ensure they are doing all they can to engage their patients in an open and transparent manner in determining the best method in which to make payment or assist them in qualifying for some type of benefit.”