[February 19, 2014]

Fitch: High Deductible Health Plans and Rising Consumerism Negatively Impact Ratings

Link to Fitch Ratings' Report: High Deductible Health Plans: A Key Driver in Growing Health Care Consumerism
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=736808

Rapid migration from traditional indemnity and managed care plans to high deductible health plans (HDHP) could compress financial performance over the near term and negatively impact ratings, according to a Fitch Ratings report.

'The increasing shift to HDHPs meaningfully impacted patient volumes in 2013. We expect the growing popularity of these plans to further challenge utilization rates going forward,' said Jim LeBuhn, Senior Director and Sector Head.

The growth in HDHP is one of the key drivers in the transformation of the US health care system to a value based, consumer driven market from an episodic, patient oriented model. Studies have shown employees enrolled in HDHP are more cost sensitive in their health care decisions.

With patients shouldering a larger portion of health care costs, bad expense is expected to increase ovr the near term. Hospitals and health care providers will have to change billing and collection practices to focus on point of sale collection, development of installment payment plans and health plan counseling services.

Fitch believes this change will require substantial retraining for professionals in the finance, billing and admitting departments with a greater emphasis on customer service and sales. Similarly, the need to connect with prospective patients through the internet and social media will be increasingly important.

For more information, the special report 'High Deductible Health Plans: A Key Driver in Growing Health Care Consumerism' is available on the Fitch Ratings web site at www.fitchratings.com.

Additional information is available at 'www.fitchratings.com'.

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