They are artists and managers, drivers on call and professionals who are ready to hop a plane to lend their expertise at a moment’s notice. They are gig workers, independent contractors who have shucked the shackles of corporate life for the freedom to choose their own assignments on their own time.
But while many of these professionals have mastered living with uncertainty—the uncertainty of when the next assignment will arrive or when they’ll receive their next check, for example—there is one concern that leaves many gig workers feeling unsettled: how to access the right level of healthcare coverage at an affordable cost.
Studies have shown that 63 percent of “gig workers” chose this untraditional path willingly, lured by the freedom to choose their own projects and set their own schedules. But the rising trend of gig workers also establishes a large pool of adults—many of whom are not making much more than minimum wage—who are without regulated benefits and legislative protection when it comes to healthcare.
Combine this with the rise in patient financial responsibility caused by high-deductible health plans (HDHPs) and increased patient co-pays, and it is clear that the new wave of “gig patients” will have a deep impact on the business of healthcare.
Looking at the numbers
Gig workers are becoming increasingly common. A recent Intuit study estimates that 34 percent of the current workforce belongs to this growing pool of workers and predicts that 40 percent of American workers will be independent by 2020.
It has been speculated that new tax laws may fuel the growth of this worker pool even faster. In fact, based on recent studies, freelancers are expected to become the workforce majority by 2027 based on the current growth rate, with nearly 50 percent of Millennial workers already part of the gig economy.
For the healthcare industry as a whole, the concern is with how the move toward a gig economy may impact patient payment. Independent contractors are twice as likely as employees to report they do not have health insurance. It is not a stretch to assume that this number will increase with rising premiums in the individual market and the instability of the Affordable Care Act. What’s more, surveys have found that Americans delay care because they cannot afford it.
Those are stark statistics that have healthcare leaders bracing their organizations for an economic hit. Due to increased co-pays and high-deductible health plans, patient payments now account for 30 percent of healthcare revenue. The gig economy establishes a workforce that exists in the blackhole of insurance—earning too much to qualify for government aid or subsidies, but often too little to be able to comfortably afford rising healthcare premiums or high deductibles.
For example, an Earnest study that explored earnings for more popular gig economy sites such as Airbnb and Lyft found the vast majority of workers make less than $2,000 a month. Compare that with the typical consumer who is now responsible for $1,820 in deductible payments this year and $4,400 in out-of-pocket costs. The numbers simply do not add up.
With 73 percent of healthcare providers reporting that it takes them one month or longer to collect from their patients, and 68 percent of patients failing to fully pay off medical bill balances in 2016, the question becomes: Can hospitals and health systems survive the gig economy?
Mitigating the risk of “gig patients”
The good news is that the gig economy in many ways represents patients’ preferences. People want to and are even willing to take risks to achieve a certain level of control over their own lives. The same rules apply to the desire for greater options in paying for the care and services that they receive.
Here are a few ways that the healthcare industry can apply the gig economy mentality to patient billing:
- “Gig patients” need options. Having only one solution for payment, such as a hospital payment plan, is no longer enough, especially when 73 percent of consumers say that they have significant healthcare expenses. The industry must consider offering multiple approaches for fulfilling out-of-pocket healthcare expenses. These include charitable assistance as well as short- and long-term financing at various interest levels to match the up-and-down incomes of temporary workers.
- “Gig patients” need flexibility. Consumers’ out-of-pocket healthcare expenses are higher than ever, so payment options should adapt to their fluctuating economic circumstances. Ideally, financing options should be defined clearly up front, with payments set at an amount that patients are comfortable with – and the option to adjust the terms of the payment plan throughout the life of the plan. This is one way of meeting patients in the middle and removing their fear (and likely avoidance) of a giant bill.
- “Gig patients” need control. It’s not just dollar signs that overwhelm a patient when it comes to paying medical bills. Look for ways to simplify the payment process, such as by offering access to an easy, online payment system, eliminating credit checks before services are delivered, removing the threat of collections or punitive damages in favor of a more collaborative approach to resolving balances, and exploring ways to consolidate bills from multiple visits or family members.
Across the industry, consumers are experiencing increased stress over medical bills, but if there is any good news to come from tough discussions around rising healthcare costs, it is that the emergence of new strategies and technologies for approaching patient payments. With the rising gig economy, increased flexibility around patient payment options may prove to be critical to the financial success of many hospitals and health systems.
Photo: Stas_V, Getty Images