The unfriendly nature of high deductible plans. Are you the new self insured?

The unfriendly nature of high deductible plans. Are you the new self insured?

There is a growing legion of employers that are moving to plans with higher deductibles. The come in different flavors such as consumer based plans and HSA plans. The difference is the consumer based plans cannot be rolled over into your IRA the following year.

The idea behind these plans is that the patient will likely pick and choose their health care providers based on cost, and since they now have more skin in the game (it is their money vs. a low co payment). Since health care costs (so we are being told) are continuing to rise, even though you as the patient are receiving and using less, your premium and the premium for your employer continues to rise mercilessly from year to year. Employers are embracing this concept to lower their premiums and then offering to fund part or most of the deductible with their funds usually in the form of a debit card with the name of the insurance carrier on it.

Most health care providers are having to adapt to these new realities by taking payments up front, and make other changes to their practices, while continuing to discount their fees according to the insurance companies fee schedules. Most physicians are being paid much less now than they were 12 years ago which is a fact, yet facility fees for procedures, MRI’s and other diagnostic tests are still paid at unrealistically high levels. Most plans are hoping you forgo what you need which will drop costs even further which is now happening and people are avoiding expensive and minimally effective medical procedures that used to be covered with just a co payment.

While it puts you in control, the good news is that people looking for medical services are more likely to look for health care providers and assess the costs. The bad news is that costs do not tell the entire story, since some very effective providers charge more because their level of service is more effective and as a result, they may spend more time, and work more comprehensively. On the other hand, some ineffective providers may spend less time yet take twice the amount of time to get an inferior result, and in the end cost more. Patients must be aware of value.

Also, your insurance companies negotiated fee depending on the service and health care provider may not be very good. An example is recently, a family member had a brain MRI which the insurance company allowed over $900 for, yet the test took 45 minutes. If my family member was paying cash, the same test is $550 which begs the question, should anyone with a plan like this ask for cash rates when getting an MRI rather than offer their insurance and then send the bill in themselves? Under Obama care, the problem is not resolved but aggravated because we now have compulsory insurance so it is very unlikely that will work too much longer. Perhaps, Stephen Brill was right in his Time Magazine article, that we needed to handle the cost problem before we created compulsory insurance. Right now, the public is losing this battle, since we are the new self insured whether we like it or not. The only difference is we need to pay for it on a monthly basis whether through our employer or ourselves through the new exchanges, but without price transparency and quality transparency, costs are a mystery and we now feel the pain more by knowing how we are nickle and dimed by the health care system, drug companies and health care institutions. It is my opinion that in 4 years, we are offering the public Medicare for all, and it will likely start with over 50, who are the most expensive to insure. I also expect the price and structure of this updated program will be revamped to focus on the new realities of costs and effectiveness.

What should the new self insured do to get the best value for their health care dollar.

1. Focus on quality, not just costs.

2. Find open minded doctors, who will offer and explain all options for care to you, and avoid those who are unnecessarily expensive. The $900 MRI is the same as the $550 MRI except for the price, and their cost of performing the service is likely half of $550.

3. Avoid speculative procedures, hoping they will work. Often if they do work, after a large expense, the relief is short lived. Do your research, there are often better and more conservative options.

4. Consider alternatives to traditional medicine such as nutritional approaches and chiropractic medicine. While more of the public continues to embrace these approaches, some lifestyle changes can pay dividends and these providers are about natural care and a healthier lifestyle.

What do you think? As always, I value your opinion.