TransUnion’s study of Millennials’ relationship with consumer debt reveals that this generation differs from older generations in their financial behaviors and motivators, and they do so in ways that are of particular interest to healthcare revenue cycle professionals. Select key findings of the study include:
- Millennials lag in credit participation and differ greatly from Gen X in their use of credit cards 2. Millennials open fewer credit card and mortgage accounts, but open more auto and personal loans than Gen X
- Subprime Millennials’ credit performance is worse than Gen X subprime consumers
- Millennials are less likely to fully pay out-of-pocket medical expenses
That last point is one to hold in focus. Although as a generation, Millennials are overwhelmingly insured, they are especially slow to pay their balance healthcare bills. Results from the study reflect that in 2016, almost three-quarters of Millennials did not pay their medical bills in full, compared to 68% of Gen Xers and 60% of Baby Boomers. The problem is only getting worse: In 2015, 68% of Millennials did not pay their bill in full, up from 65% in 2014.
In this new era of patient-as-payer, hospitals and physician practices are growing in their concern that the amount of payments patients are responsible for is also increasing. We’ve seen that healthcare consumers do not treat medical bill payments like loans or credit cards. Even people who promptly pay their mortgage or their car note either don’t pay, or take much longer to pay their medical bills. And yet, TransUnion’s study shows that in the last decade, the percentage of healthcare provider revenue collected directly from patients has increased from less than 10% to more than 30%. The trend is fueled by both insurers and employers shifting payment responsibility to patients in the form of higher premiums, copays, co-insurance and deductibles.
A generation in context
It’s worth noting that Millennials came of age during the 2010 Patient Protections and Affordable Care Act (ACA). Among other things, the ACA mandated health insurance, and it also allowed young adults to stay on their parents’ insurance plans until age 26. As Millennials face the harsh reality of skyrocketing medical costs and skimpy paychecks, other expenses are simply coming before paying their balance medical bills.
What would a revolution look like?
At present, most hospitals and physician practices are not prepared to meet Millennials’ expectations of patient-friendly, technology-enabled billing and payment processes. To capture engagement of this connected generation, healthcare billing and collections will have to overhaul its fundamental operations. This industry is still stuck in paper, billing too far into the rev cycle, and offering very few options for how to pay. This is a generation accustomed to paying as it goes. To engage this generation, there will need to be pre-service estimates of course, point-of-service and mobile and online payment options and easy financing. All this will go a long way to creating a digital healthcare experience that is in line with the way Millennials do all their other business.
Editor's note: For more on the discussion of this digital revolution, see this other story today regarding yesterday's Congressional hearing about fintech.