As consumers, we spend more time researching television, vacation and vehicle purchases than making health care spending decisions. That’s according to an insurance industry survey that finds analyzing health coverage comes in far behind the time Americans consider other purchases.
The implications of this are clear: mounting debt, or worse, lapses in care that could lead to the onset of medical problems. Consumers should arm themselves with information, but that is difficult and confusing. Whether the Affordable Care Act remains the law as it is now or if it is repealed and replaced, the trend is the same: ever-increasing premiums, co-pays and deductibles. There is also the added possibility of exclusions for pre-existing health problems and the institution of lifetime caps on health coverage. Regardless of how health reform evolves, it will be imperative for individual consumers to understand their coverage and find the best values in health care.
Care First Blue Cross Blue Shield, one of Maryland’s top insurers, is requesting a staggering 50 percent hike in next year’s premiums on individual plans sold on the state’s exchange. For those covered on employer plans, the Kaiser Family Foundation finds four out of five employees pay an annual deductible averaging nearly $1,500 for single coverage and over $2,000 for families. Accounting for premiums, deductibles and co-pays from primary care visits to prescription drugs, consumers face potential costs outpacing most big-ticket items.
That’s the environment we are in now under the Affordable Care Act, and the financial calculus affecting families and individuals will be upended again in the event Congress passes legislation relaxing mandated coverage requirements and certain price controls. Yet the reality is that both under current law and the bill that passed the U.S. House of Representatives earlier this month, there is no government-led solution to rising costs. As it stands now, patients delay or forgo health care due to out of pocket costs. Kaiser found that 27 percent of insured individuals postponed seeking needed health care, 23 percent went without a recommended treatment or test, and 21 percent declined to fill a prescription.
The question becomes what consumers can do to empower themselves. Established under the Affordable Care Act, Maryland’s online health care exchange is intended to enable consumers to evaluate insurance options much as they would use popular websites to plan vacations. The site lists plans and their monthly premiums, annual deductibles and co-pays. Finding a specific doctor, identifying hundreds of prescription drugs that may be covered and understanding terms like balanced billing and co-insurance becomes more of a challenge as consumers are re-directed to insurance company websites, which in turn, further direct people elsewhere. This may explain why consumers turn to the insurance companies themselves to compare costs, often by phone.
Only 17 percent of people who have sought price information said they used websites run by companies or organizations other than their insurance companies, according to a report commissioned by the non-profit Public Agenda; 69 percent of Americans also say a website showing how much different doctors charge would help them with their health care spending.
Such price transparency will become the norm especially as consumers bear more costs and risks. Here we can look for private sector innovations to compile this data and make it easier to understand than reading the fine print in insurance policies. Added incentives for consumers and businesses to provide additional data to make a “smarter” database is likely.
The information already exists, to some extent, for patients to make informed decisions on quality and value-based health care. The federal Centers for Medicare and Medicaid Services collect data from health care providers across the country. And under Maryland’s unique “all-payer” rate-setting system, a state agency assembles detailed cost information from hospitals statewide. What both systems lack is a consumer-friendly public reporting system.
When we buy an automobile, it is not necessary to know the displacement of the engine or even how it works. Instead we seek bottom line performance metrics such as fuel economy, acceleration and safety ratings to determine value. This is how health care purchasing decisions will evolve. We will use information to help us pick the right primary care doctor for us within our health plan. Similar data will help us evaluate specialists and hospitals. One can factor in quality, cost, location, testing, hospital and information networks into their decision.
As consumers, we should empower ourselves and not rely on politicians to “solve” our insurance and medical needs. The challenge is to demand new approaches using modern technology to present health care and insurance options in a more intuitive manner.