Health insurers are back in the 20th century when it comes to medical billing — and that’s especially frustrating to young people.
On average, U.S. businesses now conduct about half of their payments electronically, boosting consumer expectations of being able to pay for virtually anything with the click of a button. Yet health insurers use electronic methods on average for only 15 percent of payments.
That’s according to a study released Thursday by PricewaterhouseCoopers’ Health Research Institute, which polled consumers on where and how they’re most unhappy with medical billing practices and laid out some strategies to improve things.
The Affordable Care Act contains some measures designed to make insurance coverage easier to understand, mainly through requiring insurers to provide consumers with a sheet explaining benefits in plain language and showing examples of how a few specific conditions may be covered.
But it doesn’t require insurers to update or improve billing practices, which have long led to confusion for consumers. Bills often take a long time to arrive after a health service is provided and they’re often confusing, making it hard for consumers to contest them.
“The health care billing and payment model must change as consumers demand systems that reflect the mobile, one-click reality of their lives,” the study’s authors wrote.
New medical billing codes set to take effect in October could further complicate things, as insurers and providers will be required to use the updated codes to transmit information about specific health conditions. The system includes more than 14,400 different codes used to identify diseases, symptoms and abnormal findings.
The study found that millennials were more likely than other Americans to challenge their bills. Nineteen percent of 25 to 34-year-olds said they’ve asked insurers for a discount, compared to 8 percent of the general population.
Dissatisfaction with insurance and medical billing was highest among the affluent. One-third of study respondents earning six-figure salaries said insurance isn’t affordable, while 19 percent of all respondents gave that response. High-income earners were also more likely to complain of confusing bills and express suspicion that charges weren’t accurate.
And those who visit hospitals the most were also the unhappiest with the health care billing and payment system. One in two respondents rated hospitals poorly on price transparency and affordability.
Hospitals got especially poor results overall, compared to pharmacies and insurers. When asked to judge their convenience, transparency, affordability, reliability and seamlessness, respondents rated pharmacies the best and hospitals the worst.
On the flip side, consumers said what they want the most from insurers, doctors, hospitals and pharmacies is the opportunity to find out what a treatment or drug will cost them out of pocket ahead of time and to comparison shop without it being a big hassle.
Insurers and providers should imitate successful retailers such as Starbucks, Amazon and Wal-Mart if they want to become more competitive, said Bill Marvin, chief executive of InstaMed, a group that handles health care payment transactions.
“If it is too much of a hassle, you will lose consumers’ interest,” Marvin said.
Some insurers and providers are venturing into more modern practices. For example, Aetna members can manage their medical bills online using Citigroup’s Money2 for Health. But there’s a long way to go, the study’s authors note.
“The industry is burdened with systems that do not work together and bills that are difficult for the average consumer to decipher,” they wrote.
To reach its findings, PwC surveyed 1,000 adults and analyzed commercial insurance claims from 34 million Americans.
