Today’s Managing Health Care Costs Number is $1478
The portion of Americans facing high deductibles continues to increase; Willis Towers Watson’s 2016 report shows that 82% of employers offer an account based health plan (which has a deductible high enough to qualify for a health savings account), and 24% of employers offer this as a “full replacement” plan where employees have no health insurance alternative. Kaiser Family Foundation found that 51% of employees were in plans with deductibles of over $1000, and the average plan with a deductible had a deductible of $1478.
Brad Arrick, MD, who is completing a Masters in Health Care Management at the Harvard TH Chan School of Public Health, did a literature review on the implications of deductibles. Some of his references:
1. Trivedi AN, Moloo H, and Mor V. (2010) Increased Ambulatory Care Copayments and Hospitalizations among the Elderly. NEJM 362:320-328 Increasing ambulatory copayments for Medicare beneficiaries decreased ambulatory care use and increased hospitalizations.
2. Shapiro MF, Hayward RA, Freeman HE, et al. (1989) Out-of-Pocket Payments and Use of Care for Serious and Minor Symptoms. Arch. Intern. Med. 149:1645-1648 Higher out of pocket costs led to decrease in care for both serious and minor conditions in those with chronic diseases. Note that this has been reproduced more recently – see for instance this article from American Journal of Managed Care (2011) which shows decreased use of preventive care in HDHPs- even though preventive care is not subject to out of pocket cost sharing.
3. Wharam JF, Zhang F, Eggleston EM, et al. (published online January 9, 2017) . Diabetes Outpatient Care and Acute Complications Before and After High-Deductible Insurance Enrollment. JAMA Intern. Med. Low income diabetics had more preventable emergency department visits when they switched to high deductible health plans. (Note – Frank Wharam, the lead author, is a HSPH grad and an alum of HPM 235)
4. Narang AK and Nicholas LH. Out-of-Pocket Spending and Financial Burden Among Medicare Beneficiaries With Cancer. JAMA Oncol. doi:10.1001/jamaoncol.2016.4865. Medicare beneficiaries without supplemental insurance incurred OOP expenditures that were a mean of 23.7% of their household income, with the top 10% incurring OOP costs that were 63.1% of their household income
5. Neugut AI, Subar M, Wilde ET, et al. (2011). Association Between Prescription Co-Payment Amount and Compliance with Adjuvant Hormonal Therapy in Women with Early-Stage Breast Cancer. J. Clin. Oncol. 29:2534-2542. Higher cost share led to lower fill rates and less persistence on hormonal therapy that could prevent recurrence in women with breast cancer
6. Dusetzina SB, Winn AN, Abel GA, et al. (2013). Cost Sharing and Adherence to Tyrosine Kinase Inhibitors for Patients with Chronic Myeloid Leukemia. J. Clin. Oncol. 32:306-311. Drugs like Gleevec are miracle drugs- CML was once associated with an 18 month life expectancy, and on these medications, people have life expectancies approaching the rest of the population. Higher cost sharing was associated with 70% higher rate of discontinuation (17% vs 10%) and a 42% increase in nonadherence. This article was published in 2011- and the cutoff for higher cost sharing was $31 a month, which seems quaint. Imatinab (Gleevec) now costs $146,000 a year, and is often in a “fourth tier” where patients are responsible for 10% or more of costs until they reach their out of pocket maximum.
All in – high deductible health plans are especially effective at lowering cost through lowering utilization (more than from shopping – I’ve posted on that previously). However, the utilization decreases are of both high and low value services. Some suggest that value based plan design can “fix” this problem – carefully calibrating benefit design to value of services. I’m not optimistic, as such plans will be complex (and therefore hard to explain –especially to sick people). Design of such plans will be complex since the value of an intervention might differ based on individual clinical characteristics, never mind individual preferences and values.
We can address total health care costs through demand side (patients) or through the supply side (providers). Reading this paper and reviewing the references makes it even clearer to me that we need to focus more attention on the supply side.
EmoticonEmoticon