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Explications
Featured in: Insurance Dispatch
Okay, now that we know what CDHC is, how does it work? We examine the fundamental differences between co-pay plans and HDHP’s.When last we met, I promised an example of how Consumer Driven Health Care (CDHC) plans work “in real life.” Seems to me that the best way to do this is by example; in this case, a real client with whom I’ve recently been working, and whose situation is not uncommon.
Mr and Mrs Smythe (well, “Smith” is a bit overdone, no?), a happily married couple with three lovely and active children, are shopping for health insurance. Mr Smythe has left his previous employer, and needs health insurance for himself and his family. In this case, everyone’s healthy (although, in future episodes, we’ll look at what happens when they’re not).
There are two routes we could take (okay, there are hundreds, but I only have so much space here):
First, a “traditional” PPO (co-pay plan), with $25 office visits, an rx card, and a $1,000 (per person) deductible, followed by everyone’s favorite: 80/20 co-insurance. That is, the first grand is on the insured, then the insurance company pays for 80% of the next $10,000 of medicine committed, and then kicks in 100% after that. The family’s monthly premium for this plan is $450.
In this corner, the High Deductible Plan (HDHP), with no special co-payments for office visits or rx; everything goes towards a $5,000 family deductible (hang on, it does get better). First thing to notice, though, is that there’s zero co-insurance. None, nada, zip, does not apply. That is, once the deductible is met, everything’s paid at 100% (well, okay, not everything, but all covered expenses). And the monthly premium is $220. For the whole family. Not too shabby.
So what?
Well, let’s see what happens when the Smythe’s have a claim or three:
Scenario 1 – PPO in a “good” year: This year, the Smythe’s were pretty healthy, with a total of 5 office visits (at $25 a pop) and 4 rx’s (some generic, some not). Bottom line: the Smythe’s paid out $125 for office visits and $150 for rx’s. Grand total: $275.
Plus the $5,400 premium. Mustn’t forget that. Real total: $5,675.
HDHP, by contrast: same 5 visits, totaling $500 ($100 each, although that’s probably on the high side; I just want to be fair). And another $500 for med’s (okay, obviously that’s high, but there’s a larger point here):
Grand total: $1,000 out of pocket. Plus the $2,640 premium. Real total: $3,640.
Oh, wait….that’s still $2,000 less than the PPO plan. Money that could be saved, by the way, in a tax advantaged Health Savings Account (HSA), which could come in mighty handy…
Next week: Scenario 2 – Catastrophe. Until then…
Be well.
Henry Stern, LUTCF is an independent insurance agent in Dayton, OH. A licensed Continuing Education instructor for Ohio and Kentucky, he has well over 20 years of experience "in the biz.” You can read more of Henry’s work at InsureBlog.
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This week's column is up over at The Medical Blog Network. Using a real life example, we look at High Deductible vs Co-Pay plans.
Comments (33)
There could be a "value added" to the HDHP plus HSA: namely, the ability to subscribe to health maintainence from a PCP. I would love to be paid by my patients to keep up with all their preventive care and disease management for a subscription fee. I could get a yearly subscription to this type of care and then require copays for visits if needed, although much of it could be done over the internet. I think that answers the biggest concern of many people with the HDHP, namely, the avoidance of care that should be done (such as diabetes management or preventive healthcare). We are able to innovate in such a system, where in the PHO model we cannot.
Rob
Augusta, GA
New Websites:
Musings of a Distractable Mind
As it is, patients are free to use their HSA's to pay for the very services you suggest. Why would you advocate that they spend those dollars needlessly?
If the patient feels that there is a value in paying you a retainer, then that is his choice. But I fail to see where that will help either reign in costs nor help with over-utilization.
To the contrary: if a patient is paying you a stipend, he is more likely to spend more dollars, but with no discernible advantage.
Implicit in your position is the argument that folks with HDHP's routinely ignore basic care. This is not, however, borne out by the evidence.
Unless I missed your point?
I take offense at the suggestion that it is greed that motivates me to suggest this. If by "greed" you mean "being paid for a valuable service," then I guess I am guitly as charged.
A study published recently in the NEJM showed that the average patient coming to the doctor gets between 50 and 60% of the care they should be getting. This is from physicians who should know what care needs to be done. The problem is that there are over 200 guidelines that need to be thought of, and that is too much to expect from patients, and even doctors without some sort of information system. I think it is far too much to expect people to understand what decisions to make. To just put it on the plate of a patient and say "you decide how to spend your money" is asking more of what most patients want. If they can be assured that if there is care that needs to be done preventively I will contact them, it is a value-added. You can say that patients will keep track of their own care, but it still takes the reminder from Jiffy Lube to get them in to change their oil. In this case there are 200 different things that need to be considered.
Other studies have shown that consumers who are concerned about their own health don't always make the right choices. There was thought for a while to make the Statin drug Mevacor available "behind the counter" - from a pharmacist, but not requiring a prescription. The study that made this idea sink was one that showed that in this case in other countries, the majority of people taking the drug preventively, did not actually need to be taking it (to the tune of 90% of them taking a potentially harmful drug without real need). The boom of self-pay carotid screening or whole-body CT scanning shows that consumers don't make the right choices for their healthcare always (these studies, although anecdotally able to show benefit, are very poor tests to do to screen the general public).
Furthermore, having all of the information from their medical record at my disposal, I can tell what care is needed when - for instance, how often a colonoscopy is due with their family history of polyps. Do you expect people to understand the difference between hyperplastic, adenomatous, and tubulovillous polyps and the risk each ensues? Do you expect patients to know that a family history of colon cancer does not include uncles or grandparents? If it is left totally up to them, there will spring up a lot of people wanting to get their hands on that money the patients can freely spend. Don't you think they need an ally who understands what is really needed?
I think some patients realize they need a medical "advisor" who can watch for care that needs to be done and contact them when it does. Greed? Hardly. We are not talking about a huge amount - maybe $100 per patient per year - but enough to make it worth my time. I think you make us doctors for either greedy or foolish. We are not greedy to offer a valuable service to our patients and expect to be paid for it. We are not foolish enough to do so just to be nice people. I can't call my accountant without expecting a bill. Why should I not be able to give the patient peace of mind and expect to be paid for it?
Rob
Augusta, GA
New Websites:
Musings of a Distractable Mind
Concierge services have been springing up over the country, but not for $100 per year. More like $2000.
My former family doc switched his practice to the Concierge model about 2 years ago. I have no idea how well it has worked. With 3 family members, I really didn't feel it was worth the extra $6,000 per year just to have valet parking, a "free" annual physical (plus extra for lab work) and his private line for consult.
I do understand and appreciate the plight of PCP's but in their case I believe the flaws in the "system" are in the way in which they are paid.
The HDHP/HSA combination works well when it is allowed to function as originally intended. The current copay system leads to a false sense of value where patients really believe it only costs $20 to see a doctor and $25 for an Rx. If PCP's were not compensated via copay their revenue would increase per patient and they could afford to spend more than 8 minutes with a patient without worrying about coding issues. Instead of the copay, bill that patient for the actual time it takes to review the medical history, complete the consult, and prescribe a treatment protocol.
Before copays this is how most docs were paid. On the spot and in cash.
Two comments:
- The idea of professional, independent, skilled information managers using advanced information technologies and assisting consumers in making wise healthcare decisions is excellent, and there’s a definite need. I’d even like to see wellness assessments and well-care practitioners help consumers learn how to preventative methods for avoiding health problems and complications from chronic illness. Anyway, I wrote about a similar concept in the early ‘90s, where patients with complex problems would go to multidisciplinary diagnostic and referral centers to be evaluated and directed to the most appropriate and cost-effective providers. See http://wellness.wikispaces.com/Tactic+-+Establish+Multi-disciplinary+Diagnostic+and+Referral+Centers
- While and HDHP can reduce costs for the wealthy and for young healthy employees and save money for their employers, it is not a panaceas by a long shot. The value of HDHPs and HSAs depend on ones age, health status, and even the state one lives in. It also carries with it the risk of making insurance more expensive for those who need it most by reducing the risk pools. See http://wellness.wikispaces.com/Three+Potential+Solutions#hsa
Steve Beller, PhD
http://wellness.wikispaces.com
And I appreciate, of course, the feedback.
However.
Dr Rob:
I did not aver, nor would I, that providers should not be paid for their services. My issue is with your model; that is, that a patient needs to have you on retainer. In effect, you are proposing a capitation plan fully financed by the patient. That model is in direct conflict with the idea of CDHC.
Dr Steve:
I agree with some of your first point; consumer empowerment is, after all, the foundation of CDHC. Indeed, more and more carriers have begun to implement transparency mechanisms.
Your conclusions, however, are not supported by the facts:
■ CDHC plan participants are more likely to visit ambulatory care facilities and specialists than [those] in traditional plans.
■ Health measurements were stable for members with chronic conditions.
■ (T)hose with chronic conditions [e.g. diabetes] continued to seek medical care.
Additionally, the canard that CDHC is only of benefit to the young, healthy and wealthy is falacious:
■ 40% of those who purchased such plans earned $50,000 or less, and
■ Almost half are over age 40
And the list goes on.
I got an upper endoscopy today (everything was fine) and the Gastroenterologist had tons of patients coming in - clearly they were making a ton of money. Yet when a primary care doctor talks about adding a service they are accused of greed. Ophthalmologists earn nearly 10 times my income, yet I am the one saving the lives while they are doing Lasik. Clearly there is a lack of respect for what we do. I don't see my suggestion as being "put on a reatainer," but rather paying for a service - namely paing me to keep track of all of the guidelines and periodically see if a patient is in need of care (rather than waiting for their call).
If patients can self-direct care and get care when they need it, then it would be a step up from the current situation (where doctors are expected to keep track of this stuff for free and only do so half of the time even when the patients come in). I think you overestimate the success of the current situation and underestimate the difficulty of patients to keeping track preventive care that doctors fail miserably at. My suggestion was to take a quantum leap forward in that realm (or at least doubling the current rate for patients willing to participate). I could guarantee that they would get the needed care offered to them. Right now the only thing that motivates me to do this is OCD and "the goodness of my heart." We get paid less for doing good work.
Hence my frustration with your comment.
Rob
Augusta, GA
New Websites:
Musings of a Distractable Mind
#9: Big IFs
Henry,
The criticisms of high deductible health plans on the wiki come from numerous sources, they aren't my personal conclusions.
My personal conclusion on the wiki is that despite the concerns cited, HSA/HDHP "...may be one factor that helps lower healthcare costs for some people, but only if consumers are able to determine when they need care, what care they need, where they should receive it, and if their money will run out given a catastrophic illness. One suggestion is to use 'Infomediaries,' which are businesses that advise consumers about their treatment and provider options. This is similar to the independent agents who give consumers information about the technical performance, reliability, customer satisfaction, and prices of products and services for automobiles and other products. Using such independent advisers in healthcare might help payers overcome consumers’ current lack of trust in them and enable consumers to make more informed decisions."
So, people can certainly save money with CDHC, but only IF they choose a combination of deductibles and copays that -- after premium payments and out of pocket expenses -- end up costing less than a traditional indemnity policy. It also depends on selecting the right providers, who give you the right advice, deliver the right care in the right way, at the right time, in a cost-effective way, and help you avoid costly illness through prevention programs. Otherwise, CDHC could cost many thousands of dollars MORE than the alternatives.
Enabling consumers to make such determinations correctly is A HUGE IF because the information is not readily available and understandable to the typical consumer! That's my point. This is a very complex, multifaceted issue that goes well beyond looking at possible cost saving scenarios. And we simply don't know how this will all play out long term.
Steve Beller, PhD
http://wellness.wikispaces.com
Dr Rob:
First, I'm very glad that the procedure was successful, and that you're okay.
Second, I think we're talking at cross purposes: as I have repeatedly said, I have no problem with providers charging for their services (indeed, I would question the judgment of those who do not). If you are not charging for phone consultations, then that is a practice which you should probably reevaluate. It is not, however, an indictment of the system per se.
I sense some bitterness ("Clearly there is a lack of respect for what we do"), which is unfortunate, because it clouds your own judgment on this issue. You may not see your proposed model as "being put on a retainer," but that is, in fact, what you proposed. That you can't see that would seem to underscore my inference.
Your "frustration with (my) comment" is understandable given your assessment of your current situation. Although you didn't ask for it, I have a suggestion: perhaps you could discuss this idea with your HDHP patients, and guage (from their reactions) whether or not your idea has merit. Who knows, maybe you'll be pleasantly surprised.
Dr Steve:
I find it difficult to take seriously one who relies on the notoriously unreliable Wikipedia for accurate, unbiased information.
Nevertheless, for the sake of lurkers, I'll try to address your concerns:
First and foremost, CDHC is not primarily about saving money. This is a marketing strategy encouraged by insurers (and others), but it is not the overarching goal.
Rather, it is the more efficient use of those dollars by the patient ("consumer"). One of the great reservations I have about the chances of its success is the still nascent condition of what I call "transparency:" the availability of accurate and reliable pricing information. There are a number of reasons for this, and more information is becoming available, but it has been a frustratingly loooong process.
I'm also amused at your conclusion that "we simply don't know how this will all play out long term;" I suspect that was exactly what the buggy-whip manufacturers said at the turn of the previous century, too.
I am talking about "managed care." We pay a HUGE premium to the insurance companies to manage the care of patients - to say whether or not a procedure is warranted and if a test is needed. Yet they seldom have accurate information. I would not give these people 24/7 access to a personal line, 1 hour visits, etc. that most of the boutique medicine clinics do. I would simply offer to manage their care at a higher level than they could on their own. I think 100/year would cover it and you would probably consider doing that if that was all I charged (I too would balk at $3000 extra). I am not talking about making 2 classes of patients (that is why the idea of Conceirge medicine is repugnant to me), I am saying that due to the fact that the current system does not recognize managing preventive care (primary or secondary), I would be willing to set a reasonable price for such service.
I see boutique medicine as on the fringes of ethics (putting money before the needs of the patients). I see this as simply a way to improve the care of my patients and not going broke doing it. If I got 100 patients doing it, it would amount to an extra $10k per year. It would be very reasonable to me for the amount of work it would take, and it would be $100 well spent on the side of the patient.
I don't see much of a downside to this (aside from accusations of being greedy).
Augusta, GA
New Websites:
Musings of a Distractable Mind
#12: Bitterness?
No, I just don't like to be talked down to.
This is far more complex of a situation than you think. I think there is a place for HDHP and HSA's, but they are flawed in many ways. If you really think this simple solution will fix everything, then you probably think everyone else is stupid for not grasping this. The system is a mess, and it will take many things to improve it. I am a major proponent for EMR and feel that they are one of the keys to saving healthcare. I am not naive enough to think that it will fix everything.
HDHP and HSA's have their place and will restore some of the "free market" aspect to healthcare, but the major advantage of HMO's over fee for service care was the coverage of medications and preventive services. Medicine is not like car maintainence - it is not just reactive to problems and is not just fixing problems through procedures. It is far more complex and requires a system that encourages good care. If you don't take care of your car, you pay more. If you don't take care of your body, you become much more expensive for everyone and everyone ends up paying for your stupidity. I think it is important for consumer driven healthcare to be educated and guided. There are far too many people willing to stick their hands in patients' pockets and make them think it is benefitting them (I can see a person spending their HSA on chelation therapy or reflexology). Again, you need to encourage good care economically.
Besides, if I charge $100/patient per year and patients would pay for it, what objection could you have? I would assume you know they would do better than if they did not spend the $100. If they don't want to spend it, then they can make that choice too. Do you think I should do it for free??
By the way, Steve is not talking about Wikipedia, he is talking about his wellness wiki - a worthwhile read.
Rob
Augusta, GA
New Websites:
Musings of a Distractable Mind
#13: Straw men?
You may be surprised, but I do not believe that CDHC is a "panacea."
I happen to agree with you that the current system is complex, and not all of the "problems" lend themselves to simple solutions. Could you point out exactly where I averred that such was the case?
It's a shame that you think that you're being "talked down to," but what response, exactly, would one expect when lamenting that "there is a lack of respect for what we do?"
And of course CDHC requires the consumer to be "educated and guided." In fact, it seems to me that you, as a physician, play a key role in that. Again, I have never claimed otherwise.
I have no objection to you charging $100 a year to anyone, for anything; in fact, I would suggest that you're lowballing (hmm, back to that self-esteem issue, I suppose). My argument is that it is an unnecessary expense, given that the patient is free to call you at any time (and, of course, pay for the consult). If you can actually get your patients on board with this, well, hey, more power to ya. As I said, I'd love to hear how that works out. Perhaps we've stumbled on a new health care delivery model. Seems to me, the more ideas that get floated, the more likely it is that we'll find useful solutions.
Thank you, BTW, for the heads up re: Dr Steve. I clicked over to his Wiki (that sounds naughty), and found it interesting, if unpursuasive. OTOH, it may be of help to folks who are noodling through the whole health care delivery system idea.
Henry - I appreciate your comment. How might the Wellness Wiki be more persuasive?
Steve Beller, PhD
http://wellness.wikispaces.com
#15: Fair enough...
I'll have some time a little later this week to go over and read through it more thoroughly. Once I've done that, I'll put on the ol' thinking cap and noodle it thru.
Meantime, be well.
The HDHP is just a return to the original plan design dubbed the comprensive major medical circa 1975. Prior to that time there were hospital plans, no outpatient cover, just a daily R&B payment and a surgical schedule. All outpt was out of pocket including meds, doc visits, therapy, et al.
Then in the mid 70's the hospital only plans gave way to the comprehensive major med with an unheard of $250 deductible. No benefits were payable for anything until the deductible had been met. Once that was satisfied doc visits, Rx, hospital, surgical . . .everything was covered at 100% in most cases. (This of course pre-dates managed care with networks, etc.). Some high rollers would go for a $500 deductible to save even more money on premiums.
Adjusted for inflation (CPI, not medical care inflation) a $250 deductible in 1975 is equivalent to $936 now. A $500 deductible is equivalent to $1872.
Looking strictly at medical care inflation which typically runs 2x - 3x the CPI, the $250 deductible in 1975 would be approximately equivalent to a $3,000 deductible today.
No one filed bankruptcy or nelgected to have their health attended to in 1975 because of a $250 deductible. I fail to see how that would happen in today's economy with a $3,000 deductible.
We live in a society where people think nothing of buying a new $30,000 (or higher) automobile every 3 years and making $500+ per month car payments. What is so foreign about having a $3,000 deductible that may never be hit in a 10 year time frame?
#17: I understand that
The problem as I see it is that the main constraint on spending is a patient's finances. This then becomes a sort of "self rationing" of care. I think we all have the same goal: improving the value of healthcare in the US. There are 2 ways to accomplish this:
- Driving down cost
- Driving up Quality.
HSA's/HDHP's tend to focus solely on the 1st, which is very important. The problem is that if you also drive down quality, you are compromising the value of the care and erasing gains you have made. Plus, some would argue that high quality medicine is cheaper in the big picture than low quality medicine. That is why some advocate P4P - increasing cost but incentivizing quality and so driving that cost back down even lower.
For instance, the DCCT trial showed that intense diabetes control significantly decreases complications of diabetes. Now, it is more expensive to have intense diabetic control, but the gain is much bigger on the backside - less dialysis, less blindness, less heart attacks. If a patient decides to go the poorly controlled route, they are not the ones to pick up the tab for the complications - it is generally Medicare and Medicaid that does this. Even if we said, "well, they just shouldn't do that," it would not work. In the US, a person knows if they are totally irresponsible, the "safety net" will pick them up in the end. People won't be left to die because they did not spend their HSA's properly. We MUST have some way of improving quality. Regardless of what one study showed, most DOCTORS don't make quality decisions when it comes to offering good care. How can patients be expected to do so? There has to be someone out there going after the quality side of things. Yes, I think that HSA's have a place, but I am sceptical of whether that place will really be important.
Henry, I am sorry if I hurt your feelings. I will say, I don't get accused of having a poor self-image very often.
Rob
Augusta, GA
New Websites:
Musings of a Distractable Mind
If I offered my prevention for $100 and got 1000 people signing up, I am doing better than if I charge $500 and get only 100. I would tend to want to price it low so that poor people could afford it and so that the volume would be maximized. There is a "sweet spot" there somewhere, and I throw out $100 off the top of my head, but my intent is to make it a non-offensive number and something my patients can all afford if they want it. I thought that would be seen as virtue rather than vice.
Rob
Augusta, GA
New Websites:
Musings of a Distractable Mind
Especially if you're healthy!
I imagine scenario 2 will tell everyone how HDHP's will benefit those who have cancer or other chronic health conditions.
There's a difference.
BTW, you didn't hurt my feelings, so no apology is necessary. I admit that it's frustrating to read your comments, understand exactly what you're saying, and still be told I got it wrong.
At the risk of sounding like a broken record (or, for our more hip readers, a scratched CD), I suggest that you try it out, and let us know how your patients (and prospective patients) respond. I cannot stress strongly enough that I do not believe that CDHC is the "Holy Grail." There's a whole host of reasons why that's so; suffice it to say, I believe that it holds promise for solving many of the problems we currently face.
One last thought, which occurred to me while taking a much-needed walk with my better half earlier this evening:
I presume that you are a network provider for at least a few insurance carriers (if this is incorrect, then please disregard the following). If this is indeed the case, you may want to go back and re-read your network agreement; it is not unlikely that what you propose would violate your contract(s). "Better safe than sorry."
No one is forcing consumers into the HDHP/HSA. It is a choice.
An individual or family can fund their health care by health insurance premiums for no deductible or low deductible plans and copays . . . or they can fund the routine items on a self pay basis and leave the insurance for the catastrophic items.
A family of 4 in Atlanta will pay a popular Blue carrier $929 per month (health insurance is more expensive in Atlanta than Dayton) for a copay plan with a $500 deductible. In addition to their premiums, they pay $30 every time they go to the doc. Need meds? You pay the first $200, then $15/$30 copay. Something major? You pay the first $500 then you pay 20% of the excess over $500 until you have another $2,000 out of pocket.
That same family will pay $267 per month for a plan that covers all expenses in full after a $5450 FAMILY deductible.
Want less risk?
How about $290 per month for a plan that covers 100% of expenses in excess of $2500 per PERSON?
Either way, you can pay the carrier $600 per month to cover your routine items AND cat claims. Or you can save that $600 and pay your own routine claims.
Seems to me we have come full circle, back to Hank's original example.
In NY, a family of 3 pays $594/mo for a HIP Select EPO 80% Coinsurance $30 PCP copay / $50 SPC copay. It has a 20% coinsurance with a $20K family annual max OOP ($10K per individual) and a $6K family deductible ($3K individual). Once the coinsurance is reached, there’s a $30 copay for each PCP visit and a $50 copy for specialists. A BCBS policy for $945/mo has neither deductible nor coinsurance, has slightly lower copays for office visits, and there’s a $500 copay for inpatient stay ($1,250 family max). Meds and other services are similar, except the HIP has a $15 copay for dental and cleaning and BCBS has no coverage.
That means the family saves about $4,200/yr if no healthcare services are utilized (if my figures are correct). The savings decrease rapidly as services are services are used since the first $10K per person comes out of pocket. So, as I see it, if the family has more than, say, $6-7K in total medical expenses (to account for the BCBS copays and tax breaks – I'm not a broker, so I guessing here), the more expensive traditional BCBS plan actually saves them money!
Now, I’m not saying the HSA/HDHP is bad. For people who are young and generally healthy, earn a good living thus have a substantial tax break, and live a life with minimal risk (thus avoiding accidents requiring inpatient stays), these plans can save thousands of dollars/yr. BUT, if you’re in your 50’s, aren’t wealthy, and have a pre-existing condition, then a serious health problem could cost you tens of thousands of dollars, in addition to your monthly HDHP insurance payments, leading to financial ruin. If you will address this issue in part 2, Henry, do let me know.
So, I say again, it seems to me that the value of CDHC depends on the individual’s situation. If my conclusions are wrong, please let me know so I can readjust my thinking.
In addition, trying to compare the dizzying array of plans is futile, and then trying to guesstimate how much care you will need in the coming year is equally difficult. If anyone has a software program (or just a plain spreadsheet) detailing every health plan and plan option for each state in a way that enables direct head-to-head comparisons, please let me know!!! How do insurance brokers help consumers know what’s best for their family?
And, on top of all that, selecting providers that deliver the most cost-effective care for your particular needs requires a level of transparency that doesn’t yet exist. This issue becomes especially important if a health plan has a limited network of providers (e.g., PPO and EPO).
Furthermore, how are consumers to determine the most cost-effective tests and treatments for each health problem occurrence when multiple ones exist? How can they decide what is excessive, what is under-prescribed or omitted, what is inappropriate, etc.? This is why I concur with Rob’s argument for independent consumer advocates (patient advisors). That would at least give them “a fighting chance.”
Henry,
May I point out this article, that contradicts your evidence indicating those with HDHP's don't ignore basic care.
It was also reported that respondents with HDHP’s and CDHP’s (34%) were twice as likely to avoid or delay seeking care then those with comprehensive plans (17%), due to that cost factor.
For proving my point(s).
As I've (repeatedly) said, CDHC is not a cure-all; the fact that some folks have trouble understanding how they work (as underscored by Marc's citation), indicates that those who purchased the plan either:
a) Really didn't understand what they were buying, or how it should be used, or
b) Were not given a choice (i.e. an employer sponsored plan).
Neither of these serve as an indictment of CDHC, but rather demonstrate a need for more consumer education, and readier availability of consumer-friendly transparency.
Dr Steve's example is also helpful: again, no one plan is going to be a "perfect fit" in all situations. It's interesting that he chose to obfuscate the issue by using a flawed HSA model. One of the key benefits of a properly designed HSA is the deletion of both co-insurance and co-pays, which add to the cost while hindering plan effectiveness.
Dr Steve raises an interesting (and valuable) point, however, when he asks "How do insurance brokers help consumers know what’s best for their family?" That is a terrific question, and one which I will put "in the queue" for a future installment. Thank you!!
Plans are specific by geography. What is available in GA is not available in NY and certainly not at the same rates. This is especially true when (attempting to) compare Blue plans or HMO's.
EPO's are an entirely different animal, generally even more restrictive than even HMO's.
Sometimes the numbers work in favor of an HDHP/HSA, sometimes they don't.
As for the wide array of plans, it is almost impossible for someone who does not work in the field every day to properly evaluate and compare plans, benefits, rates, underwriting, contractual provisions, etc.
However that certainly does not stop DIY's from dialing up the WWW and picking the plan with the lowest rate, then wondering why their claim doesn't get paid.
As for this comment if you’re in your 50’s, aren’t wealthy, and have a pre-existing condition, then a serious health problem could cost you tens of thousands of dollars, in addition to your monthly HDHP insurance payments, leading to financial ruin
If that is the case, you probably can't qualify for coverage at any price so it really doesn't matter what kind of plan you want. Not all pre-ex conditions are serious and some can be covered, some can be rated and covered, some will be excluded, and some will get you denied.
If $5k in out of pocket during a calendar year leads to financial ruin then you have bigger problems than just health insurance.
And this . . .If anyone has a software program (or just a plain spreadsheet) detailing every health plan and plan option for each state in a way that enables direct head-to-head comparisons, please let me know!!!
No software program that I am aware of. Even if it existed, it would cost a fortune and would require monthly updates.
I have 8 carriers I regularly check for almost every client. Between those 8 carriers there are over 1800 plan variations. Once I have solid information including a medical history & budget I can usually narrow the choices down to 3 or 4 plans in 10 minutes. This is done at no charge to my clients and is more reliable than software.
#26: A very complex issue
We seem to all agree that HDHP/HSA is a very complex issue. They are beneficial to some and hurt others. An honest and intelligent broker should be able to help the consumer navigate those murky waters of plans, just like an honest and intelligent patient advocate would do for complex medical decisions.
Thus, it seems to me that CDHC ought not be directed by the consumer alone. There's just too much complexity and uncertainty. Maybe it should be "Consumer-Assisted Health Care?"
HDHP is no more complex than any other type of health insurance plan. Fact is, properly understood and implemented, it is far simpler (no co-insurance, no PCP involvement, etc).
I also disagree with your implication that it is potentially more "harmful" than co-pay plans. Again, properly understood and implemented, HDHP's redirect funds away from insurers and back to consumers. I happen to believe that my clients need/want/deserve their dollars more than my carriers do. And, once they have appropriate tools, they'll be able to make more informed, cost-effective (and ultimately better) health-care choices.
We do agree that "an honest and intelligent broker should be able to help the consumer navigate those murky waters of plans;" however, this holds true irrespective of which products are under consideration.
Your patient-advocate idea is intriguing: you and Dr Rob seem hell-bent on putting more money into the system, at the expense of the insured, than advocating for informed, personal responsibility. However, as a believer in the power of the marketplace, I'd suggest that you start up your own patient-advocacy business. Once it's designed, funded, and implemented, I would be happy to donate advertising space for it (here and/or on my blog).
In the meantime, perhaps a free such service will suffice.
Henry said: "Fact is, properly understood and implemented, it [HDHP] is far simpler (no co-insurance, no PCP involvement, etc)." Don't get me wrong, I'm not advocating any particular insurance model. There are dizzying arrays of options in all types of plans, as far as I know. With the addition of HDHP/HSA, the selection process becomes more complex because there are many more things to consider. Maybe it's not complicated to you because it's your job to make sense of it all and advise the consumer as to what plans will protect them and save them money. Expecting a consumer to do it alone is simply unrealistic and potentially dangerous. Honest, intelligent brokers are actually consumer advocates receiving payment for their services.
You say: "I also disagree with your implication that it is potentially more 'harmful' than co-pay plans. Again, properly understood and implemented, HDHP's redirect funds away from insurers and back to consumers. once they have appropriate tools, they'll be able to make more informed, cost-effective (and ultimately better) health-care choices."
I've never disputed that HDHP can save members (and employers) money, sometimes substantial amounts; I’m certainly not opposed. The key is, imo, the statement “once they have appropriate tools.” What tools do you refer? I’m a firm advocate of having sound tools helping consumers make wise decisions based on valid information! ASIK, these “appropriate tools” don’t exist.
You say: "Your patient-advocate idea is intriguing: you and Dr Rob seem hell-bent on putting more money into the system, at the expense of the insured, than advocating for informed, personal responsibility.”
Quite the opposite. The consumer-advocate idea is to put the “informed” in “informed, personal responsibility.” Consumer advocates, such as reputable insurance brokers informing consumers about policies and healthcare professionals informing consumers about treatment options, would save money by helping individuals make the most cost-effective decisions.
"I concur with Rob’s argument for independent consumer advocates (patient advisors)."
"Consumer advocates, such as reputable insurance brokers informing consumers"
Which is it?
In the first place, I've already stated that, should a consumer so choose, he is free to contract with whomever he wishes to make these decisions. But someone has to pay for that -- unless your "consumer advocate" volunteers his services. Now that actually sounds like a workable idea: in Ohio, for example, seniors have access to a service, staffed by volunteers and overseen by the DOI, called OSHIIP (careful how you say that). I frequently refer my "mature" clients to them, with positive results.
In the second place, the agent is already being paid -- by the carrier. Now one might argue that the cost of the agent is built into the premium. Fair enough. But folks who buy directly from carriers pay the exact same rate as those who use an agent. (I'm skipping services like eHealth, because they are agents, too, and thus are paid commissions)(not that there's anything wrong with that).
So unless you're talking about one of these two scenarios, then you are proposing another layer of cost (maybe we could call it fee-for-service?). Again, it's fine by me if folks wish to pay for that. But my opinion is that it's a waste of money. OTOH, it's not my money, so it's got that going for it.
The "tools" to which I referred fall into the category of "transparency." And now I have a dilemna: I've already written a (future) column about this subject, so I'm loathe to go into detail here (sort of stealing my own thunder). So I'll ask you to be patient, and in return, I'll move it up in the queue.
Deal?
#30: It's a deal
Please go at your own pace with your presentation. Transparency is a hot topic (along with P4P) and won't cool off anytime soon.
About paying for advocacy/advisor services, if it brings value to the consumer at an acceptable price, it's a worthwhile deal, whether buying insurance, deciding on a particular treatment, being educated by a wellness coach, or using Consumer Reports to help select a reliable car. If it's not of value, then it's worthless, even if free.
The only way to assess if the consulting fee is worth the price is after the fact which almost makes it a moot point. By that time you have paid the fee and may not realize you got bad advice until months or even years later.
In a prior life I worked with consultants that were employed by major consulting firms. Overall, I judged them to be slightly above incompetent. They had no real working knowledge of most plans and never made an outright recommendation. What they could do was put together snazzy presentations with lots of pages & words and then charge a hefty fee. In the end it was up to the client to "pick one" from the list and the consultant would then implement the plan.
In other words, the consultant was paid even if the advice was of no value or even totally incorrect.
Kind of like paying alimony . . .
It's truly sad that competence, compassion, integrity, and accountability aren't highly valued prioties in many of today's business and government cultures. On the one hand, it's all too easy for the unscrupulous person to deceive and manipulate consumers into making foolish decisions with their money. On the other hand, ignorance (see, for example, the Knowledge Void) makes it all to easy for well-meaninged professionals to give consumers poor advice. And quality improvement requires a level of leadership, accountability, transparency that has been long been avoided (see, e.g., Michael Millenson recent talk at http://council.brandeis.edu/pubs/Prince13/Princeton%20Millenson_Prius.pdf)
However, advocates/consultants armed with valid, objective, useful tools (e.g., software programs) that enable them to give consumers valid, objective, useful information to guide their decisions is crucial for CDHC. The same goes for healthcare providers using evidence-based guidelines and outcomes studies to continually improve care.
Unfortunately, such decision-support tools have been largely dismissed in our country. So, we are now stuck with immature health information technologies that are full of gaps and accomplish only a small fraction of what is needed.
Likewise, "transparency" tools tend to rely on administrative data only, which weakens their usefulness in making sound decisions.
So, for CHDC to work in a way that truly benefits the consumer, we must focus on developing and using kinds of tools and consultants/advocates whose advice to consumers is based on adequate amounts of valid, objective, useful information. And getting to that point takes leadership, resources, will, commitment, and time.
#33: Medical Bill Debt
have medical bills...want a discount go here http://www.hcmediation.com/
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Another consideration, in the copay plan with a cat claim the OOP (out of pocket) will most likely be $3,000. The deductible + another $2,000 in coinsurance.
Plus the copays . . .
The HDHP has $5,000 OOP but for the entire family.