Consumers respond to high-deductible plans by using less healthcare services, which in turn leads to a decrease in doctor visits and clinical laboratory test orders
Are many Americans avoiding medical treatment because of the high-cost of their health plan deductibles? And if so, will such an underutilization of healthcare affect hospitals, independent medical practices such as pathology groups, and clinical laboratories?
Two separate studies: one a survey co-conducted by the Kaiser Family Foundation and the Healthcare Research and Educational Trust (KFF/HRET), and the other an analysis by the Health Care Cost Institute (HCCI), investigated the dynamics behind trends in the healthcare marketplace leading to these questions.
Employees in HDHPs Pay Higher Healthcare Costs
The KFF/HRET “2016 Employer Health Benefits Survey” noted only a modest increase in employers’ healthcare insurance costs in 2016. Healthcare costs for workers, however, have increased dramatically over past years. This is partly due to employees—who are trying to keep premiums affordable—moving to plans with high-deductibles. And, as they take on more financial responsibility for their health services, consumers are accessing less care, the study revealed.
“We’re seeing premiums rising at historically slow rates, which helps workers and employers alike, but it’s made possible in part by the more rapid rise in the deductibles workers must pay,” said Drew Altman, KFF President and CEO, in a press release following the release of the KFF/HRET survey results.
If the trend holds, those deductibles are expected to keep rising. Since 2015, deductibles have risen on average 12%, and since 2011, they’ve increased by 49%, according to the KFF/HRET survey.
At about the same time, a separate analysis by the Health Care Cost Institute (HCCI) revealed that people with high-deductible health plans (HDHPs) used less care over a 4-year period, even though they paid more out-of-pocket on deductibles, copays, and coinsurance (excluding premiums), as compared to people with higher-premium conventional plans.
Will Increased HDHP Enrollment Cause Reduction in Utilization of Clinical Lab Tests?
It’s safe to assume, therefore, that healthcare utilization by workers with high-deductible plans will continue to drop, as they try to hold onto more of their take home pay. And, indeed, that trend must affect healthcare and health service providers as well, as the number of office visits decline and revenue shrinks.
According to a Modern Healthcare report, more than 150 million Americans turn to their employers for health insurance, and another 20 million people purchased insurance through the Affordable Care Act insurance exchanges.
In 2016, about 29% of all workers were in HDHPs, up from 20% in 2014. However, though deductibles have increased, premiums have not risen as much. Just 3.4% in 2016—according to the KFF/HRET report.
Employers see an opportunity to control their medical insurance costs by asking their employees to pay more upfront through higher deductibles, according to a Kaiser Health News (KHN) story.
“I think it’s the biggest change in American healthcare that we are not really debating,” said Altman, in a Philadelphia Inquirer story.
When consumers are asked to pony in, employers and analysts say they are more aware of what healthcare costs and less likely to partake in unnecessary services, Modern Healthcare noted.
Higher Cost, Lower Usage
“If the intention is lower utilization will lead to lower spending, we’re seeing that with high-deductible insurance. I don’t think we have a good handle [on the effect on patient health],” said Amanda Frost, HCCI Senior Researcher, in the KHN story.
The HCCI analysis revealed that workers in HDHPs (also called consumer-driven health plans) use less healthcare overall than people with traditional insurance plans. But their out-of-pocket cost is 1.5 times higher on average than workers with other insurance coverage, according to the HCCI statement.
HCCI’s “Consumer Driven Health Plans: A Cost and Utilization Analysis,” was based on claims provided by Aetna, Humana, and UnitedHealthcare for 40 million people per year who were covered by employer-sponsored insurance. Researchers studied their healthcare use and spending from 2010 to 2014.
According to KHN’s summary of findings, people with HDHPs:
• Accessed 13% less inpatient care;
• Used 10% less outpatient care;
• Purchased 13% fewer prescriptions; and
• Paid nearly 25% of medical costs out-of-pocket as compared to 14% paid by those with conventional plans.
In fact, people with HDHPs paid an average of $1,030 out-of-pocket on healthcare as compared to $687 paid by people in traditional plans, noted a Washington Post article.
Will Consumers with HDHPs Get Their Lab Tests?
The clinical laboratory is a gateway to many healthcare services. So, it’s key for pathology industry leaders to be beware of consumers’ increasing responsibility for the healthcare tab and their propensity to avoid access to care because of rising out-of-pocket costs.
Medical laboratory managers are advised to keep test prices transparent, and to work with front-line staff to step-up consumer education about insurance plans and collecting payments for clinical laboratory tests at time of service. In this way, consumers may be encouraged to accept increased healthcare costs if it comes with additional side benefits.
—Donna Marie Pocius