Consumerism
The buzz words consumer-directed benefits and managed care are broad terms with important implications for employers.
The recent trend seems to be toward consumerism in an attempt to provide something that has been missing from health benefits for a very long time.
The goal is to reach a point where the patient cares about cost and quality and is actively involved in the financial aspect for their healthcare choices.
The underlying premise is to reach the point where patients will assume a greater role in managing their own healthcare and the associated costs. By providing financial incentives and information to employees, corporations can encourage them to assume this role.
Currently, high-deductible health insurance products like MSA’s, HSA’s are probably the most widely publicized component of this consumerism model. One of the purposes for these products was to help consumers see more clearly the cost of services and allow them to negotiate prices individually. The goal was to help patients make more value-driven healthcare decisions.
Although these plans do serve this purpose, the problem arises because most patients who choose them are not high utilizers to begin with. A high percentage of healthcare dollars are accounted for by a small percentage of high-cost claimants and these are not typically the ones who choose these types of products. Therefore, consumer-directed health plans will not provide the total solution.
Other components of consumerism that need to be implemented are preventive services, wellness and disease management programs, and better communication mechanisms that will provide patients with more information about the quality and cost of the services they are buying.
The common theme among all of these ideas is the patient or direct consumer has to become more involved in the process. We need to eliminate the third party vendors who continually add cost, delay care, reduce quality and confuse the picture.
If patients were required to pay for the service when it is was rendered and then dealt with the reimbursement from the insurance company based on their agreement, this process of healthcare would change in a hurry! Costs and utilization would significantly decline.
The recent trend seems to be toward consumerism in an attempt to provide something that has been missing from health benefits for a very long time.
The goal is to reach a point where the patient cares about cost and quality and is actively involved in the financial aspect for their healthcare choices.
The underlying premise is to reach the point where patients will assume a greater role in managing their own healthcare and the associated costs. By providing financial incentives and information to employees, corporations can encourage them to assume this role.
Currently, high-deductible health insurance products like MSA’s, HSA’s are probably the most widely publicized component of this consumerism model. One of the purposes for these products was to help consumers see more clearly the cost of services and allow them to negotiate prices individually. The goal was to help patients make more value-driven healthcare decisions.
Although these plans do serve this purpose, the problem arises because most patients who choose them are not high utilizers to begin with. A high percentage of healthcare dollars are accounted for by a small percentage of high-cost claimants and these are not typically the ones who choose these types of products. Therefore, consumer-directed health plans will not provide the total solution.
Other components of consumerism that need to be implemented are preventive services, wellness and disease management programs, and better communication mechanisms that will provide patients with more information about the quality and cost of the services they are buying.
The common theme among all of these ideas is the patient or direct consumer has to become more involved in the process. We need to eliminate the third party vendors who continually add cost, delay care, reduce quality and confuse the picture.
If patients were required to pay for the service when it is was rendered and then dealt with the reimbursement from the insurance company based on their agreement, this process of healthcare would change in a hurry! Costs and utilization would significantly decline.
Labels: consumerism, healthcare
posted by Anonymous at 6:10 AM
7 Comments:
It would be much easier for the healthcare provider if they didn't have to collect from the insurance provider and flip the responsibility to the patient. It is an interesting concept. The sad reality is that some folks can only go to the healthcare provider with the help of insurance because they can't afford us otherwise. With that being the case if they had to pay they may not go for care when they really need it.
HB, you always talk of health insurance having no cost to the insured. This is typically not the case. I pay over $400 per month, deducted from my pay, for my family's insurance. In addition to $25 office co-pay, 20% co-pay on diagnostics, out-patient surgery, and in-patient care with a $3,000 per person annual deductible. Every year the premium goes up and the coverage decreases.
Anon 11:10,
I don't often come to HB's defense but you are proving his point, at least to some extent.
You are paying attention to what healthcare costs because you can see the money flowing out of your pocket. Not that many years ago hardly anyone paid any attention because it did not "cost" them anything.
One more thing, even with what you are paying, have priced similar coverage to yours on the private market? I would hazard a guess it would run $1,500/month or more. As you can see, it could be worse.
I have said historically Health insurance had no cost becuase compainies paid everything.
You are absolutely correct in the fact more people are paying more each year out of pocket.
We still have a very large percentage of people who do not pay the price for what the service actually costs.
I'd be willing to bet you are a better consumer of healthcare now that you are paying more out of pocket.
HB,
Are you getting that warm, fuzzy feeling too? We agreed on something!!(smile)
I spent 20 minutes one day this week trying to explain to a patient how unnecessary and costly it would be to give him a script for Motrin 600 mg instead of simply having him take 3 over-the-counter Motrins or their generic equivalent. He actually became somewhat hostile with me because he could get it more cheaply if I wrote him the script. Even after I explained such a script would provoke a 5 page fax from his insurance company asking me dozens of questions why he should have the prescription trade name medication rather than the OTC or generic equivalent. He said he didn't care. I said I did and that I did not feel his condition warranted such a medication. He stormed out of my office mad. If we are going to rein in health care costs, the consumers have to be part of the equation. Until it hits them in the pocket, this will not happen because they feel they are entitled to the "best" and the most expensive. And right now, the physicians are being made the scapegoats.
Am I a better consumer of healthcare? Hmmm... A couple of years ago my wife had her gall bladder removed. At that time, my deductible was $500 and it ended up costing me $1100 and something out of pocket. Today a similar procedure would I guess cost me $3,000. I don't see what impact being a better consumer would have.
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