A healthy population is the common goal of any community yet achieving this can be a complex task. We must prevent disease as much as possible, improve the quality of our treatments, and make the systems through which we disseminate these tools much more efficient — all at the same time. Even if we succeed at this, not all of our population will benefit, due to issues with healthcare access. This is where health equity plays a critical role in overall population health.
The CDC defines health equity as “when every person has the opportunity to “attain his or her full health potential” and no one is “disadvantaged from achieving this potential because of social position or other socially determined circumstances.” While this may seem straightforward, the data shows that the US is far from this reality. It is critical for all stakeholders to do their bit to realize health equity; for us, this means tackling the substantial disparity in access to credit.
Healthcare Costs Disproportionately Affect Diverse Populations
The financial side of healthcare has more ramifications than people may realize. Economic stability is one of the five domains of social determinants of health (SDoH), alongside education access and quality; healthcare access and quality; neighborhood and built environment; and social community and context. SDoHs regularly impact diverse populations differently than historically privileged groups. Those living in food deserts might struggle to obtain adequate nutrition, while underprivileged regions might have poorer schools and subsequently less robust education.
Of all the SDoHs, economic stability plays a clear role. Healthcare is expensive for everyone, but often prohibitively so for those without insurance or savings. Being in good financial health can improve someone’s health equity, by allowing them to pay for access to healthcare and ultimately improve their physical health. Unfortunately, recent data from the Financial Health Network found that financial health declined in 2022 for the first time in five years, with only 31 percent of respondents reporting as “financially healthy.” The demographic with the greatest decrease in financial health were Black people, dropping from 21 percent to 15 percent in one year.
This economic instability has a direct impact on healthcare. Research from the Kaiser Family Foundation (KFF) shows that roughly half of U.S. adults report difficulty in affording health costs, while four in ten “have delayed or gone without medical care in the last year due to cost.” Within that group, a disproportionate number of Black and Hispanic adults, uninsured adults, and lower-income adults were impacted by higher health costs. This disparity was also found among those who reported high medical debt (41 percent of respondents).
Lack of Credit Negatively Impacts Healthcare and General Wellbeing
One challenge in improving healthcare access is that many underprivileged populations still struggle to gain access to financial credit — even when they are insured. While the overall number of insured Americans is rising, this isn’t a fix on its own. A 2022 survey from the Commonwealth Fund reported that 43 percent of working-age adults are “inadequately insured,” 9 percent were uninsured; 11 percent had experienced a gap in coverage over the last year; and 23 percent were “underinsured,” meaning their coverage didn’t give them adequate access to healthcare.
In fact, KFF found that more than a third of those with insurance (37percent) had had to forgo a recommended test or treatment due to a prohibitive cost. Excessive out-of-pocket costs hit those with both individual health plans and with employer-sponsored health plans, at almost equal rates of nearly 40 percent and nearly 30 percent respectively. This is because some insurance benefits don’t cover a lot of routine procedures or co-pays, while others may require very high deductibles before the insurance provider will pay out. Even worse, some patients may not be approved for the full credit value of their plan, forcing them to find other methods of payment.
These high numbers may be tied to the patient’s own credit score, particularly if they are on an individual plan. Not only does this punish those who are already less economically stable, but it could push their credit score even lower by forcing them to borrow money and incur debt. The Pew Trust reports that two-thirds of those underinsured or with a gap in coverage had struggled with medical bills, forcing them to take on debt or make other financial sacrifices. This perpetuates a vicious cycle where a single medical emergency can ruin a family’s financial standing.
Innovating Health Insurance Benefits to Achieve Health Equity
Patients aren’t the only ones incurring debt; so are hospitals. This means that bills can’t simply be written off, without severe detriment to the healthcare provider. Fortunately, there is another solution, and it lies with the insurance coverage itself.
For Health Payment Systems, Inc. (HPS), one potential solution to this perfect storm is innovating health insurance benefits to achieve health equity. Many employers offer benefits plans that are cost effective for their bottom line, without giving too much consideration to how these plans work in practice for their employees. An easy step for employers is to make sure their staff has equal access to healthcare, regardless of income or other socioeconomic factors, and simplified billing so they understand their coverage and costs.
For example, through our PayMedix system, all patients, regardless of income or individual credit rating, receive the financial security of guaranteed credit, up to their out-of-pocket maximum. And providers and hospitals are guaranteed up-front payment. We provide a single billing statement that aggregates all medical bills and explanations of benefits (EOBs), eliminating confusion for patients, offering providers easier billing processes, and reducing hospital bad debt.
Credit worthiness should not be a factor in accessing healthcare. By ensuring that all employees can access the full benefits of their insurance, we can take a significant step towards true health equity.
The author, Brian Marsella, is President of HPS/PayMedix.