March 28 2017 | 0 Comments | 149 reads Average Rating: 3
High Deductible Health Plans: Three Tweaks Needed to Ensure Success
Health savings accounts (HSAs) and high deductible health plans have been a part of the healthcare discourse for quite some time – but the model was not widely adapted. With Tom Price, MD, taking over as our new Secretary of Health and Human Services, these plans – which place more financial responsibility on consumers – are now becoming a hot topic of conversation once again.
”I think health savings accounts and high-deductible catastrophic coverage are things that make a whole lot of sense for many individuals,” said Price, during his first Senate confirmation hearing. Indeed, Price is known as an advocate of high deductible plans, which are designed to encourage patients to be active shoppers who seek out the best value in care, thereby lowering overall costs via free-market mechanisms.
For these plans to succeed, however, they have to be done right. Here are three factors that must come into play:
#1: Financial motivation for the consumer.
Formerly, consumers would either forfeit whatever money was left in a HSA at the end of the year – or spend the remaining dollars on a healthcare item or service just for the sake of using up the funds (i.e. purchase an extra pair of eyeglasses). If consumers can hold on to the money in a HSA by moving it into retirement savings or to their heirs, then the plans will actually motivate them to become much more judicious healthcare shoppers. As such, they might think twice about going to the emergency department for a sinus infection – and instead opt for less expensive treatment at an urgent care center.
#2: Something special for those in dire need.
Even though the vast majority of Americans could be successfully served by high deductible plans, the “sickest of the sick” – the one percent of the population that account for some 30 percent of healthcare spending – will need to be covered under a distinct insurance model. This model might (or might not) be government funded. Either way, high deductible plans will not offer any advantages or benefits to these patients. As a result, they will have to be covered under a separate risk model.
#3: Appreciation for prevention.
One of the concerns with high deductible plans is that consumers will forgo preventive treatments such as colonoscopies, mammograms, and immunizations. Physicians will need to work with patients, providing them with evidence and data that clearly substantiates the need for preventive services. Consumers will then make informed choices and will be more likely to opt for the preventive services that might cost them hundreds of dollars now but save them thousands in the future. Alternatively, these preventive services can have an insurance benefit which pays a substantial percentage of the cost with the savings account paying for the rest.
If consumers can be offered high deductible plans with these features, we will be able to overcome some of inertia experienced with previous iterations of this insurance model and move toward what Price is looking for: A market driven healthcare industry. Perhaps just as important as embracing plans with these attributes, healthcare organizations will need to leverage data analytics to provide the pricing and quality transparency needed to support these plans. More about that in my next blog . . .