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Consumer Driven Health Insurance During Recession

Consumer Driven Health Insurance During Recession

Consumer driven health insurance plans are getting considered as a main solution to the crisis of health care cost.

However, a team of hospital executives told that the plans are not making people healthier, rather making them sicker. It is also affecting the hospitals' financial status.

According to Carolyn F. Scanlan, the CEO and president of the Hospital and Healthsystem Association of Pennsylvania, such plans do not work fine during financial slump.

Recently, Mr. Scanlan with his fellow executives from PinnacleHealth System and Penn State Milton S. Hershey Medical Center, had a visit to The Patriot-News editorial board to talk about the effect of America's financial recession on the hospitals.

The main apprehension of the discussion was the effect of consumer-driven medical plans. Consumer-driven medical plans generally have co-pays along with high-deductibles, which make patients accountable for major part of medical plans than that of under conventional health plans.

The target of such plans is to convince customers to expend more cautiously and to provide them financial enticement to take more care of themselves; thus they don't require much health care.

Nevertheless, the officials of Pinnacle and Hershey Medical Center told that such plans are influencing people to keep away from healthcare.

They referred to declines for preventive care like mammography and not obligatory surgeries like knee and hip replacements that are not medically compulsory but enhance patients' health and well-being. They told that the customers of consumer-driven plans mostly don't understand how much their portions for medical bills would be.

According to Kevin Spalaine of Hershey Medical Center's chief of strategic services told that the hospitals have reacted by means of calling individuals in advance of planned medical events. The main reason for calling people is to make them alert of their portions of bills and to work out imbursement plans; if required. He added that his company has made 10,000 calls in March.

Mr. Spalaine told that it is a common phenomenon that the patients are canceling procedures after knowing how larger they should pay. He also told that the patients are requesting their physicians to go for non-surgical treatments, if surgery is not a compulsory option.

But, as per State Rep. Scott Boyd, R-Lancaster, who is also a strong supporter of consumer-driven health plans, such plans are an essential footstep toward setting up a perfect healthcare system. He responded to the apprehensions of Scanlan and other hospital officials that the main reason for which people are refusing to access healthcare is its exorbitant cost.

He added that the healthcare costs are high and kept hidden from the customers. They may avail healthcare at much lower cost if it is transparent and if they could be properly informed. They may bargain and get the best deal, as it happens with other products.

However, he did not mean that consumer-driven health plans can act as a silver bullet to solve the entire cost crisis related to healthcare. But he emphasized that they can play an important role in lowering the healthcare cost to an affordable level.

But according to the hospital officials, consumer-driven health plans are a key factor for which regular hospital visits are getting down, but the emergency is getting higher. They also consider it as a cause behind rising graph of charity care, and bad credit balance including unpaid healthcare bills. However, they also mentioned that recession is also playing an important role.

A spokesman from Hershey Medical Center said that it has already paid out 13 million USD for charity care during the current financial year. The amount is increased by $2 million than that of previous year.

The chief financial officer at Pinnacle, Mr. Bill Pugh said the bad debt increased by 25% than that of last year. He added that the company has hoisted the earnings limits to let the people be eligible for free healthcare or get a discount of up to 50%. But, he admitted that the investment income is lowered by 30% to 40%, as the money is cut into for charity care.

Scanlan is also concerned about Gov. Ed Rendell's anticipated budget. Scanlan stressed that the hospitals are the economic anchors in Pennsylvania counties. She added if they have to dismiss employees and holdup main developments, it will deepen the financial problem in the community.

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