Those who find problems should identify solutions as well. My post last week about the “pre-lash” against consumer-directed health plans (CDHPs) identified a number of problems – but for all their warts, CDHPs, and particularly HSAs, do have a very important role to play in health care reform.
The problem lies in the blunt instrument of the deductible, presently north of $2000 for individuals and $5400 for families. The idea behind the big deductible is to make people good buyers of all things health related.
But 70% of Americans spend less than a thousand bucks a year on health care. So CDHPs will have little impact on them, except to discourage use of preventive care…
About half of all health care dollars are spent by 5% of the population. A deductible has zero impact on these folks; they blow thru it in a month or two.
So, we need to make the people who spend the most more cost-conscious.
The best way to do that is to spread the individual’s cost share across a larger portion of their spend. That doesn’t mean increasing the deductible, it means greatly reducing the deductible and implementing a copay of say 20%, for all care above the deductible up to the max out of pocket (which could be the same as today’s deductible amount).
This approach has the added benefit of reducing the individual’s costs for maintenance meds, routine care, preventive care, and screenings. Studies have shown that high deductibles actually discourage use of maintenance meds etc – a problem that could lead to much higher costs (e.g. a patient stops taking hypertension meds and has a debilitating stroke).
There’s more work to be done, but this rather basic change would be a vast improvement.
Mr. Paduda,
What are your thoughts on CDHPs and PPO networks? If CDHPs are going to make us better consumers of healthcare, why can’t I find a plan without a network. The costs of managing a network are substantial. Let me negotiate the price, instead. Perhaps a CDHP could drop the network and put those resources toward a consumer rating system for providers.
Benjamin,
Why do you think you can negotiate a price better than a corporation that directs care for millions of members? Do you not think that there is such a thing as a volume discount in health care?
JD,
I’m not really interested in negotiating a lower price than a plan with millions of members. The fact that there are plans negotiating these prices, gives me all the leverage I need. I’m more interested in the freedom to select any physician I wish.
I don’t have a problem discussing the price of medical services with a physician. The act of doing this usually takes them aback and gets you face-to-face with the billing department, where the real answers are.
Granted, many people who are not in the ‘biz’ may be uncomfortable doing this. I don’t think that justifies the paternalistic, “consumer-directed” plans. The HSA legislation is fairly explicit about what’s covered and what’ not. The CDHPs strength is reduced by a network, IMHO.
Best regards,
Ben