Delays in care by consumers continue to cloud hospitals’ finances

Unemployment is down and insurance coverage is growing, but hospitals and doctors still aren’t seeing a wave of new patients.

That’s because patients—due to rising deductibles in their health plans—are continuing to delay medical procedures, even though their job prospects are better than they’ve been in years.

That’s what recent reports, both from Indiana and nationwide, suggest.

The Indiana University Health hospital system, even though its 2014 profits were strong, is still suffering year-over-year declines in the most lucrative part of its business: surgeries.

IU Health’s overall surgeries fell for a second straight year in 2014, and remain 7.2 percent below their 2012 levels. Even outpatient surgeries, which are less expensive than inpatient procedures, are down 6.3 percent from their 2012 levels.

IU Health did see a boost in its physician office visits because about 130,000 more Hoosiers gained coverage last year due to rising employment and to Obamacare health plans.

The number of Hoosiers with insurance coverage is expected to rise even more this year, now that Gov. Mike Pence’s expansion of the Healthy Indiana Plan to as many 500,000 Hoosiers received federal approval.

But nationwide, the increase in coverage due to Obamacare has had only the smallest of impacts on the number of new patients visiting doctors. A study released last week by AthenaHealth examined medical record information of 16,000 patients and found that there was a barely perceptible increase in new-patient visits to physicians in 2014, compared with the previous year.

Those patients that do come for medical care are delaying, as much as they can, the really expensive procedures, noted hospital analysts at Moody’s Investors Service. That’s because the amount patients have to pay for themselves—via deductibles or co-insurance—keeps going up.

“This increase in out-of-pocket costs will continue to make many patients more carefully consider their use of healthcare services and possibly forgo or defer non-urgent care. Therefore, growth in patient volumes will remain modest,” wrote Moody’s analysts Dean Diaz and Daniel Steingart in a recent report.

Apparently, even urgent care is being affected. IU Health’s total number of ER visits fell for a second straight year last year, to levels that are 2.7 percent below their 2012 totals.

IU Health’s total number of imaging exams bounced back some last year, but still remained down by nearly 1 percent from their 2012 levels.

The impact of high deductibles is even stronger in Indiana than it is nationally. Survey results released in January by Indianapolis-based United Benefit Advisors, a network of benefits brokers, found that 49 percent of Indiana workers are covered by high-deductible plans.

The deductibles on those plans were, on average, $5,000 for family coverage and $2,500 for single coverage.

But even among those covered by traditional PPO plans, Hoosier workers faced $3,600 deductibles, on average, for family coverage, and $1,500, on average, for single coverage.

That’s up by 20 percent for families and 50 percent for singles since 2012, according to UBA’s surveys.

And since PPOs typically have co-insurance of 80 percent above the deductible amounts, Hoosiers in those plans face maximum out-of-pocket costs of $9,000 for family coverage and $4,000 for single coverage.

With many of the Obamacare health plans also featuring large deductibles, those newly insured customers face the same disincentive to run into the doctor seeking care.

“Deductibles are an element of any insurance product, but as deductibles have grown in recent years, a surprising percentage of people with private insurance, and especially those with lower and moderate incomes, simply do not have the resources to pay their deductibles and will either have to put off care or incur medical debt,” wrote Drew Altman, president of the California-based Kaiser Family Foundation, in a March column in the Wall Street Journal.

That’s what continues to cause hospital executives to be cautious about spending money.