High Deductibles– The BIG game changer. What’s REALLY controlling costs !!
Good news! A recent article in the NEJM stated that we are finally starting to see a fall in the medical cost curve. A major contributor to this cost containment is the insidious rise in high deductible insurance. Patients are making decisions NOT to seek care. A Kaiser study earlier in the year documented a continued rise in the average deductible for managed care insurance… now over a thousand dollars for a single premium. Five years ago, the average deductible was around $400. Another article in the NEJM this week states how the exchanges will result in a further rapid rise in high deductible insurance plans as individual patients opt to control premium costs by preferentially purchasing the “bronze” plans over the “platinum”… those plans are largely differentiated by the annual deductible. High deductibles will become the new norm.
It came home to me recently when I lacerated my finger while repairing my boat. There was a lot of bleeding and I could even see a tendon. I have great insurance… Blue Cross. There is not a single physician or hospital in the country that would not love to have me as a patient. Except to keep my premium low, I have a $2,000 annual deductible. I can afford that…. but it was the only way to keep my premium reasonable.
So, my finger is bleeding and I am trying to figure out what to do. I did a brief exam, and I knew there were no tendon tears or other serious injuries. It just needed stitching. In the past, no big deal… I would simply go to the Emergency Room. And as a physician, I would call ahead so that I would not even have to wait that long… and for a co-pay of only $50. Slam dunk!!
Except now, my deductible is $2,000. In practical terms, that means even though I have great insurance, for the first $2,000 of my care I am UNINSURED!! I quickly went through the calculations of what it would cost to go to the ED and get stitched up. It was over $1,000! Was it worth $1,000 for me to get stitched… especially when I noticed a roll of duct tape conveniently located in my boat. Yes, I decided to stick some tape on it until I could get home and then glue it together.
Well, two months later all is well. My finger looks OK. I realized that even I, an informed physician, had made that same choice NOT to seek care.
Patients are making the decision NOT to seek treatment when they have to pay out of pocket. Other physicians have told me anecdotally that patients they routinely see, say every six months, are now asking them whether they actually need to come in that often. In the past, that patient might have paid a simple co-pay. Now they are responsible for the full bill until the deductible is reached… and they do not want to be seen as often.
I see two alarming things happening as this trend continues:
First, by making a decision NOT to receive care, these patients could be harming themselves. Even routine prevention and management could be discouraged.
But second, I see a huge demand by the consumer for PRICE transparency. “How much will it cost? And should I shop around? Now I have to pay for it”. I envision a consumer mandate to know the cost of their treatment.
Get ready….. I have long argued how quality data transparency has improved clinical outcomes by making such data public. Now, PRICE transparency has the opportunity do the same… and with VERY interesting consequences as costs become more public and accessible, and the individual patient is more responsible for the payment.
The transparency wave may have gone tidal !!
