Consumers Blame Healthcare Providers And Insurers For Bad Financial Experiences, New Study Shows

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As evidence mounts that consumer expectations in healthcare are rising, healthcare providers may be rushing to offer online services and digital communication options. But new data released today suggests that one area providers and insurers ought to focus on more if they want to delight consumers is billing and finances. 

According to the 2021 Healthcare Consumer Experience Study from Cedar, a healthcare financial platform, many consumers are dissatisfied by their financial interactions with both healthcare providers and health insurers.

“As the healthcare industry continues to transform for the digital age, it’s increasingly clear that the billing demands of consumers need to take center stage,” said Florian Otto, CEO and cofounder of Cedar.

In the survey of more than 1,500 consumers, all of whom had paid a medical bill in the past 12 months, 40% of respondents said they are not satisfied with their providers’ billing practices and 39% reported being dissatisfied with the interactions they have with their health insurer about medical bills.

Specifically, 37% of respondents said they aren’t satisfied with the clarity of billing and payment communications from their provider. Similarly, 36% said they are dissatisfied with the clarity of explanation of benefits (EOBs) from their health insurer and 34% said those communications were not timely enough. One-third (34%) also reported dissatisfaction because of the mismatch between provider bills and the insurer’s EOBs. 

To make matters worse, consumers often have to bridge the divide between their healthcare providers and their insurer. Perhaps not surprisingly then, nearly one-third (31%) of consumers reported being dissatisfied with the coordination (or lack thereof) between their providers and insurer.

“This lack of alignment, combined with the fragmented nature of healthcare, leaves consumers sometimes feeling helpless,” Otto said. “Not only are consumers clamoring for greater explanation and fewer surprises from their financial experience, they also are craving collaboration.” 

Lack of collaboration may have consequences for both providers and payers. 

The vast majority (93%) of consumers said the quality of their financial experience with a provider was an important factor in their likelihood of returning to that provider and 57% said they’re more likely to recommend a provider who offers a good digital experience. Nearly all (96%) said the quality of their financial experience influenced their satisfaction with their health insurer. 

Thirty-five percent of respondents said they have switched or would switch healthcare providers for a better digital experience for administrative interactions with their provider and one-third have or would change insurance to get a better digital member experience.

Consumers want improvements from both insurers and providers. 

Nearly half (45%) said they would like to see greater clarity about what services are authorized by their insurance company and 42% said they want better transparency about out-of-pocket costs. One-quarter said they want better ways to get their questions answered faster and one-third want to better understand what they owe and why.

Almost all consumers (90%) said they would appreciate it if their providers posted pricing or expected out-of-pocket costs online, but only one in three said their providers do that consistently. Of the 58% who reported trying to find out-of-pocket cost information before getting care, 40% said it was difficult to find.

Specific improvements consumers want include the ability to customize how they pay their bills or communicate with their providers (64%), online payment options for medical bills (56%) and health insurance premiums (25%), the ability to complete prior authorization processes online (32%), and an easier way to reconcile payment issues online with their insurer.

The link between provider bills and insurance information emerged as another point of frustration. Nearly two-thirds (65%) of people said they wish they could see their benefits information alongside their medical bills.

Poor financial experiences and confusion over costs create a psychic toll for consumers. More than half reported feeling stressed about paying medical bills (55%), understanding their health insurance coverage and benefits (53%), and reconciling a billing issue with their insurer (59%).

Confusion is more than stressful; it may be costing consumers money, according to Kim Buckey, vice president of client services at DirectPath, a benefits advocacy and education firm.

“Consumers are overpaying for their care on both the front end—when they receive services—and after the fact—because they don’t review and question their EOBs and bills,” Buckey said. “Depending on which report you read, somewhere between 60% and 90% of medical bills contain errors—and these errors are almost never in the consumer’s favor.”

Confusion also makes consumers less likely to pay the bill at all, according to the Cedar survey. More than one-third (37%) said they won’t pay a healthcare bill if they don’t understand the administrative process or experience.

But ignoring bills can lead to worse financial outcomes. 

JAMA study published earlier this year showed that approximately 18% of Americans hold medical debt, totaling approximately $140 billion, though some estimates are even higher.

In Cedar’s survey, 19% of respondents had medical debt go into collections. Of those, nearly half (48%) said they simply couldn’t pay the bill. But nearly one-third (32%) blamed incorrect bills for winding up in collections and 28% said they couldn’t understand the bill.  

Lack of health insurance literacy among consumers is at least partly to blame, according to Buckey. Many consumers simply don’t understand the language or concepts of health coverage, which makes it hard to read and understand an EOB or a bill.

“If you don’t know what to look for—or you don’t know to ask for an itemized bill from your provider—you may not realize you’ve been overcharged by hundreds or even thousands of dollars,” Buckey said. 

Buckey encourages consumers to ask for detailed billing statements from the provider, broken out by day and service. And, she says, never pay a medical bill until you get your health insurance EOB and have a chance to look for inconsistencies.

“If anything seems odd—question it,” she said. “Mistakes happen.”

Often, Buckey says, a simple phone call to the billing department can resolve the issue. And speak up if not.

“Remember,” Buckey said, “you have the right to ask for a correction or even to file a complaint if you’re unhappy with the services you received.”