Stiffing Docs: High deductible plans pushing up bad debts … thanks, ACA

Chatting with a doctor-friend recently.

His is a very specialized 1-doctor practice (supported by a handful of well-trained techs).

Patients who are referred to him usually have a very serious condition needing sophisticated diagnostics.

My friend casually mentioned to me that – in the past couple of years — he has had to write-off more than $2 million in bad debts.

Way more than in prior years.



Here’s what’s going on …


In a prior post, we showed how health insurance premiums and out-of-pocket deductibles are going up, up, up.

See Remember how your healthcare costs were going to go down by $2,500 per family?

Deductibles now average about $1,200 for individual policies and $2,500 for family plans.

On the plus side, the high deductibles put more patients’ skin in the game … so, logically, they duck unnecessary procedures and shop around to find the lowest prices.

What’s the rub?

First, many people postpone or skip medical procedures they probably should have done.

Sometimes, that results in a bigger, more expensive medical service when the stuff hits the fan.

A second problem gets less media attention …

Consider a patient who shows up at a doctor’s office for an unavoidable $1,000 procedure.

The doctor’s office folks verify that the patient has insurance, but don’t know how high the patient’s deductible is … or, how much of the deductible has been satisfied,

The doctor performs the procedure and his office processes the $1,000 charge thru the insurance carrier.

The carrier posts the charge against the deductible, but doesn’t pay it.

Rather, the doctor has to chase after the patient to collect on the bill.

In some instances, the patient simply pays the bill.

In other cases, the patient goes on a payment program … adding costs and complexity to the doctor’s operation.

And, in an increasing number of cases, the patient is either unable to pay the bill … or, simply decides to stiff the doctors.

Eventually, the doctor turns the unpaid  bill over to a collection agency and gets, at best, pennies on the dollar.

Not a pretty situation …

And, add enough of these uncollectibles together and they become statistically significant … you know, a couple of million dollars for a single practice.

Keep your eye on this dynamic … it’s going to become an increasing big problem.



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