- Value-based care outcomes are shaped by a variety of factors – but especially the ever influential high-deductible health plan (HDHP).
The recent significant increase of HDHPs across the healthcare industry is apparently tied to their efficient ability to reduce cost.
The average insurance premium for an employer-sponsored family in 2013 varied by state between $13,400 and $20,700, according to research from the Commonwealth Fund.
The average minimum annual deductible has risen over the past decade or so. The total number of individuals with high deductible plans reportedly increased from 1 million in 2005 to 16.5 million in 2013.
“It used to be very common in indemnity plans that a patient had a low deductible of anywhere from $500 to a high of $1,500 or $2,500 and they had an 80-20 policy,” stated Mark Owen, Director of the Division of Emergency Medicine for Payor Logic, to RevCycleIntelligence.com.
“With higher deductibles, it's not just that the amount they're going to owe is more, it’s the relationship to the debt,” he explained.
“Now with high deductibles, because many more people are forced into a situation where they owe far more money than they used to for the same services, their share has grown so significantly that a lot of providers have decided we need to try to collect this money at or near the time of service.”
The higher the bill, the lower the chance of payment
HDHPs are one of the biggest revenue cycle management challenges for medical practice executives and leaders, confirmed the Medical Group Management Association (MGMA).
The more money patients owe, the less likely they are to expediently and effortlessly settle their medical bills, MGMA said.
Although a patient’s healthcare insurance once generally covered most medical expenses, patients who have grown accustomed to lower deductibles may be increasingly reluctant to pay when sudden sticker shock ensues.
Healthcare providers are indeed trying to make healthcare more affordable by engaging – not enraging – healthcare consumers.
Some providers are reportedly working to update payment policies and better manage their patient populations. Others are becoming more privy to offering an array of payment options, such as discounting a medical bill for payment in full or offering a zero-interest revolving line of credit.
Medical billing confusion demands clarification
Nonetheless, many patients are particularly confused by the contractual obligations associated with their HDHPs, said MGMA.
“When people fall ill and end up at the hospital with unexpected bills, far too often they have entered into a financial maze,” stated Richard Cordray, Director of the Consumer Financial Protection Bureau.
A 2014 survey of over 1,200 employers from PwC’s Health Research Institute (HRI) reported at least 60 percent of employers either implemented or considered implementing high deductible health plans as their primary option.
But, HDHPs are not embraced by all. The other 40 percent surveyed confirmed more interest in value-based designs.
“Amidst the new and often complex regulatory requirements of ACA and rising health care costs, employers remain committed to providing benefits,” stated the report’s authors.
“[But] at the same time [they] are re-evaluating their benefit strategies as they try to optimize the impact of consumerism, wellness and overall engagement in an effort to finally bend the health care cost curve.”
With the shift to volume, what’s next for HDHPs?
With increasing emphasis on value-based reimbursement, patients simply cannot afford to pay more than they can afford for high-quality care.
“Value-based insurance design plans are more nuanced than the ‘blunt instrument’ of HDHPs by better aligning deductibles and copayments with the value of health services,” stated a Health Affairs policy brief.
“While HSA-qualified HDHPs do include high-value preventive services for free, other services are not covered in large part until the deductible is met,” the authors explained.
Although healthcare costs have apparently stabilized, they have recently started to increase, they said.
“As health care spending climbs, the prevalence of high-deductible plans will likely continue to increase.”
“Forecasting predicts that health spending will continue to grow faster than the GDP, at a rate of 5.8 percent from 2014 to 2024, and will rise to 19.6 percent of the GDP by 2024.”
Ninety percent of enrollees in Affordable Care Act (ACA) Marketplaces reportedly have plans where the deductible exceeds the amount for HDHP qualification, said the authors.
Last year, this total came out to $1,300 for an individual and $2,600 for a family, they reported.
How HDHPs will influence and shape healthcare outcomes is merely yet to be determined, the authors claimed.
But higher plan deductibles are certainly one solid resolution to consider to keep healthcare costs at bay, they said.