What the Rise in Insurance Deductibles is Doing to Private Dermatology Practices

Dermatologists are feeling the brunt of the hike in deductible rates for medical insurance plans. Patients’ inability to pay has taken a toll on providers’ revenue, and some are ditching their private practices because of the stress of collecting payments.

According to a recent report from Bloomberg, in 2017, nearly 50 percent of people under the age of 65 living in the United States had yearly deductibles ranging from $1,300 to $6,500. Healthcare facilities large and small are struggling to wrangle late or non-existent payments. Quest Diagnostics reportedly lost $80 million in revenue in its third quarter this year due to 20 percent of billed services going unpaid. In 2015, Northwell Healthcare, a massive group of over 700 hospitals and outpatient clinics, lost $106.9 million in unpaid bills.

One Illinois-based dermatologist, Amy Derick, MD, explained that high deductibles have complicated payment procedures. “It's harder to collect from the patient than it is from the insurance,” she said. “If the plans change to a higher deductible, it's harder to get the patients to pay.”

Dr. Derick has attempted to streamline payments by introducing a “time-out” option that allows patients to call up their insurance company for an estimate before undergoing a procedure. However, despite the program, collection rates still lag and more so at the start of the new year when deductibles go back up to their initial rate.

Navigating insurance policies and interpreting medical bills have cost primary care physicians at academic institutions 15 percent of their revenue. These extra bureaucratic demands have forced providers to rearrange their business practices. Take for example surgeon and skin care specialist Tarek Fakhouri, MD. He maintains a small clinic but had to bring on an additional worker to help patients understand bills and communicate with insurers.

“It’s an unnecessary added cost to the health-care system to have to hire staff just to sit there on hold with insurance companies to find out what a patient’s deductible status is,” Fakhouri said.