Inflation continues to be a burden – food, gas, holiday spending, new year’s goals
This past year has been especially challenging as inflation costs continue to touch all aspects of daily life, leading to tough choices for many consumers as we finished the holiday season and look to goals and planning for 2023. In fact, two out of five (40%) survey respondents said inflation changed the way they shopped for the holidays.
As consumers adjust their spending habits, many are finding ways to strategically adapt to this economic challenge. And after the past few years, the need to “normalize” the holiday season may have overridden the requirement to be frugal. What is also likely to suffer this year? Our health. Many are choosing to defer necessary medical care including preventative screenings. This temporary, short-term trade-off, however, often leads to a higher long-term cost as health issues go undetected and untreated.
Inflation affects consumers when deciding to move forward with their healthcare
Cost concerns are replacing pandemic concerns as the top reason Americans defer healthcare. Specifically, 31% of consumers said they deferred healthcare in 2022 because of costs, and 26% chose not to fill a prescription. Adjusting spending patterns is not in and of itself bad, but when it leads to poor or delayed medical decisions, it can incite a different type of epidemic.
Regardless of how creative consumers become in the next month, they certainly are not going to end the year in a better financial position as 70 million Americans feel unprepared to pay for health care costs next year. For those living paycheck to paycheck, decisions between housing, transportation, prescription drugs, or necessary medical care can impact their health and quality of life.
Four ways to manage healthcare expenses in times of Inflation
Navigating healthcare with changing transparency laws and rising deductibles has already become burdensome and overwhelming for most consumers. Adding inflation to the mix has only exasperated the situation. Some of this is structural and will not change anytime soon, but we can help people navigate this season by providing education on ways to make better healthcare choices.
Four strategic tips for consumers include:
1. Be informed. Gather information about the procedure, the risk of delaying or not receiving care, and of course all associated costs. Do not fear asking questions and insist that costs are provided in writing and, if possible, seek information from multiple sources. Making an informed decision based on facts addresses the emotional turmoil associated with a significant medical decision.
2. Consider cash-pay options. This may seem counter-intuitive but paying cash for care can be a more affordable option as compared to one’s current medical plan and coverage. From the associated providers to the surgical centers, there are cash-pay options that may be best in the long run. According to Consumer Reports, a review of pricing options offered by healthcare providers, hospital networks, and treatment centers are touting big discounts for patients who pay cash upfront and forgo using their insurance. So, never be afraid to ask.
3. Take advantage of bundled pricing options. This may be a new concept to consumers when it relates to medical care, but bundled services are becoming more popular and can benefit both the patient and the provider. When healthcare services are bundled, this creates a single, comprehensive bill that covers all services and practitioners involved in an episode of care. Patients receive one bill instead of many and a better understanding of total costs to plan for financially. Using bundled payments has also been shown to lead to better coordination of care between providers, as well as a reduction in low-value care services and the overuse of care.
4. Consider saving for medical expenses as part of your monthly budget. Research shows that healthcare costs are one of the top five expenses for consumers. After housing, transportation, food, and insurance costs, the next highest line item is typically healthcare – which is why it may be a good idea to set aside money for medical expenses if you aren’t already. Building a budget isn’t about limiting yourself to only spending money on essentials. Instead, it’s about allocating your money in a way that can help alleviate financial stress in the short and long term. Additionally, if you are able to put money into a Health Savings Account (HSA) or a Flexible Spending Account (FSA), those are some tax-advantaged ways to save for healthcare expenses.
There are a lot of difficult decisions to make for every individual and family when it comes to paying for medical care—especially during seasons of inflation and tough labor markets. However, with a little planning, you’ll be better empowered to make decisions that are good for your health—and your wallet.
About Paul Ketchel
Mr. Ketchel is the founder and CEO of MDsave. He has been a healthcare entrepreneur and actively engaged in healthcare public policy for over 25 years. Prior to founding MDsave, Paul served as Chief Operating Officer for Diagnostix Network Alliance, a healthcare biotechnology sales organization that achieved over $25 million in annual sales in year one. Before that, he served as Vice President of Elanex Pharmaceuticals, one of the nation’s first startup biopharmaceutical companies, which was acquired by Baxter Healthcare in 2001. Paul began his career as a Legislative Aid in the United States Senate covering healthcare and technology issues. As CEO of MDsave, Paul has helped author 22 patents focused on healthcare payment bundling and processing while expanding the organization to over 320 hospitals across 43 states.
6. https://www.commonwealthfund.org/publications/2020/apr/bundled-payment-models-around-world-how-they-work-their-impact7. https://www.bankrate.com/banking/how-to-make-a-monthly-budget/#how