Jun 11, 2018 | Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology
Plans by large-scale employers to self-insure brings into question how clinical laboratories would submit claims and get reimbursed from inside and outside of a corporate provider/payer network
Clinical laboratories and anatomic pathology groups serving the nation’s hospitals and health systems may get increased network access to patients due to new developments in the health insurance marketplace. In recent months, both large corporate players and a number of smaller hospital systems have decided to form their own health insurance companies.
For example, six New Jersey hospital health systems announced they have taken steps to self-insure their employees by forming the Healthcare Transformation Consortium (HTC). This follows a similar joint agreement by Amazon, Berkshire Hathaway, and JPMorgan Chase to self-insure their employees as well. Inhouse medical laboratories and anatomic pathology groups that service these entities will likely find themselves part of new private provider/payer networks, which will impact how and when they get reimbursed for their services.
Both groups hope to slow skyrocketing healthcare costs, improve outcomes, and avoid having to navigate the increasingly complex insurance industry. Between the two groups, nearly one million employees will be insured directly by their companies.
Another reason these two events could be good news for the hospitals, doctor’s groups, and medical laboratories involved is they will no longer have to deal with narrow networks and mandates required of health plans subject to the federal Employee Retirement Income Security Act (ERISA) of 1974. This also may include regulations in the Health Insurance Portability and Accountability Act (HIPAA), which amended ERISA in 1996.
Local clinical laboratories will likely automatically become part of the combined provider group as well, which is good. But will they have to alter how they submit claims and get reimbursed for services rendered to a private corporate payment system?
Goals of Corporate Healthcare
In a press release, Amazon, JPMorgan Chase, and Berkshire Hathaway stated they are “partnering on ways to address healthcare for their US employees, with the aim of improving employee satisfaction and reducing costs.” A not-uncommon healthcare goal, these days.
One of the few concrete details in the release stated, “The initial focus of the new company will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.”
The six N.J. healthcare providers in the HTC include:
Together, they employ approximately 50,000 individuals who all will be enrolled in a single health plan, scheduled to go live January 1, 2019.
Kevin Slavin (above), President and CEO of St. Joseph’s Health in Syracuse, N.Y., told HealthLeaders Media. “Each of us have had our different strategies to reduce costs and improve care for our beneficiaries, but now we have six systems that can share those ideas and harness power together.” He added that they expect to see immediate cost savings per enrollee for hospital, outpatient, and medical laboratory services. (Photo copyright: St. Joseph’s Healthcare System.)
Stocks Fall in Response to Announcements
On the day that Amazon (NASDAQ:AMZN), JPMorgan Chase (NYSE:JPM), and Berkshire Hathaway (NYSE:BRK.A, BRK.B) made their announcement, UnitedHealth Group (NYSE:UNH), Anthem (NYSE:ANTM), and other healthcare companies saw their stocks fall. This demonstrates how disruptive such partnerships and coalitions can be in the healthcare marketplace, the New York Times reported.
They can be disruptive in more immediate ways, as well. For example, companies may use collected patient data to devise wellness programs they then offer their employees for free—even going as far as providing a financial incentive to participate. A healthier employee workforce means lower healthcare costs, but also less revenue to surrounding hospitals, physician’s practices, and medical laboratories.
What’s good for one group is not so good for the other, even though people are getting healthier in the long run.
And, to be fair, removing a million people from health insurance plans surely will negatively impact those companies’ finances, as well. The six HTC entities spend approximately $250 million annually for health benefits.
Kevin Joyce, VP of Insurance Networks at Atlantic Health System, a six-hospital health system in Morristown, N.J., told Healthcare Finance that, because the organizations involved in the HTC are healthcare providers themselves, the consortium has a particularly intimate knowledge of the issues causing the ever-rising cost of care.
“This is one of the ways to try to bend the cost curve,” he noted. “I honestly believe with the rise in high-deductible plans, trying to make healthcare more affordable should be the mission of both payer and provider. What makes us different from Amazon is that we as competitors came together to do this. This should have a ripple effect across all of our membership.”
Kevin Lenahan, CPA, Senior Vice President, Chief Financial and Administrative Officer, at Atlantic Health System agrees, adding, “It’s like-minded organizations that came together. We know each other. We all felt that we have a responsibility to improve quality, help transparency.”
Huge Obstacles on All Sides
In a CNBC interview covered by Inc. Magazine, Berkshire Hathaway CEO Warren Buffett emphasized that the obstacles such coalitions face are enormous.
“You talk about something that has $3.3 trillion in revenues presently going to people, and most people that are on the receiving end of the $3.3 trillion are happy with things.” He added, “If it was easy, it’d have been done.”
Nevertheless, both coalitions hope to serve as models for others. “By working closely with like-minded organizations, we can share best practices, learn from one another, and lead the transition from fee-for-service to value-based care, using our own benefit plans as proving grounds,” Joyce told Healthcare Finance.
As the trend to self-insure employees gains steam across corporate America, it will be interesting to see how the inhouse medical laboratories, and independent clinical laboratories and pathology groups that service these entities, are affected by the change.
—Dava Stewart
Related Information:
New Jersey Beats Amazon to the Punch on Self-Insured Health Plan
Amazon, Berkshire Hathaway, and JPMorgan Chase to Partner on US Employee Healthcare
Amazon, Berkshire Hathaway, and JPMorgan Team Up to Try to Disrupt Health Care
Six New Jersey Health Systems Borrow a Page from Amazon
May 31, 2018 | Compliance, Legal, and Malpractice, Laboratory Pathology, White Papers
Medicine is rapidly shifting from a traditional one-size-fits-all approach to diagnosis and treatment, to an individualized predictive and personalized medicine model with care customized for each patient. Uniquely positioned within this shifting healthcare paradigm are molecular and clinical laboratories that can provide healthcare teams with access to a rich repository of actionable genetic data.
Pathologists are becoming the point persons as personalized medicine becomes the norm, and as the understanding of the relationship between genetic variants and disease continues to grow. With next generation sequencing (NGS) accelerating the pace of discoveries, prevention and treatment will no longer be centered around “standards of care” that often result in a predetermined sequence of therapies. Instead, a patient’s genome, lifestyle, and environment will combine to pinpoint an effective and individualized treatment plan.
Because NGS is the engine powering much of this new genetic information and igniting the potential of personalized medicine, clinical laboratories have an ideal opportunity to add clinical value and generate a new revenue source by adopting NGS technologies. But—because the NGS modality places significant demands on most current laboratory information systems (LIMS) and leaves them lacking crucial functionality—labs need to have in place a LIMS specifically designed to accommodate personalized medicine’s informatics integration and workflow challenges in order to successfully integrate NGS.
The Dark Report is pleased to offer this FREE White Paper—your guide to understanding the potential that NGS technology holds for your laboratory, as well as how you can realize this potential and convert it into reality by having the right tools in place.
This White Paper provides you with a detailed discussion regarding:
- The growing role of NGS in clinical care
- NGS’ return on investment for clinical and molecular laboratories
- The role of pathologists, as NGS accelerates the transition to predictive and personalized medicine
- The information technology and tools laboratories need to successfully offer NGS-based services
- Benefits of outsourcing annotation and interpretation of gene sequences and test-result reporting
- What clinical and molecular laboratories need to know about marketing NGS services to new and existing clients
Table of Contents
Introduction
Chapter 1: Why Next-Generation Sequencing Has a Growing Role in Clinical Care
Chapter 2: How Clinical and Molecular Laboratories Can Establish NGS Services That Deliver Value to Physicians and Patients
Chapter 3: What Pathologists and PhDs Need to Know about Helping Physicians Understand the Value of NGS in Diagnosing Patients, Selecting Best Therapies, and Monitoring Patient Progress
Chapter 4: What Information Technology and Informatics Capabilities Do Clinical and Molecular Laboratories Need to Succeed with NGS-based Services?
Chapter 5: MIMS’ The Benefits of Outsourcing Annotation and Interpretation of Gene Sequences and Test Results in Support of Patient Care
Chapter 6: What Clinical and Molecular Laboratories Need to Know about Marketing NGS Services and Using NGS to Retain Existing Clients
Conclusion
Medicine is transforming from reactive to proactive, predictive care, with NGS on the verge of being transformative in many ways as it provides a direction destined to accelerate the shift in care models, and ushers in personalized medicine at the genomic level.
This White Paper discusses the growing role of NGS in clinical care and its potential to fuel the transformation to predictive and proactive medicine, as well as pathologists’ contributions to this emerging paradigm and the laboratory information technology and informatics they will need to remain at the forefront of change.
Understanding that NGS services represent a major financial commitment by laboratories, the advantages of using NGS testing as a tool to retain and grow a lab’s customer base is also examined, as is the importance of purchasing a best-of-breed molecular LIS created with big data, genome annotation and interpretation, and informed decision-making in mind.
Pathologists are uniquely qualified to advance the cause of personalized medicine among regulators, insurers, providers, and patients, but can only do so if the best health informatics technology is at their fingertips.
To learn more, download your FREE copy of “How Next-Generation Sequencing Helps Molecular Laboratories Deliver Personalized Medicine Services to their Client Physicians.”
Download the White Paper now by completing the form below.
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May 29, 2018 | Compliance, Legal, and Malpractice, Laboratory Resources, Molecular Diagnostics, Genetic Testing, Whole Gene Sequencing
Laboratory Assured Compliance Solution
A digital solution to help stay compliant, reduce paper forms and boost productivity.
Do you have checklists for checklists? Are you tired of getting cited for missing pieces of documentation? Are you tired of monthly reviews that consume you in mountains of paperwork?
Laboratories need a systematic process to track compliance and ensure a task is never missed.
Kapios has partnered with laboratory experts to develop Laboratory Assured Compliance Solution, (LACS) to eliminate the guess work in compliance and streamline the process in your laboratory. Take the paper forms your technologists complete each day, and digitalize them, ensuring that they get done on time.
What does that mean for you? Have the peace-of-mind that everything is done according to regulatory standards and recorded in real-time. No longer spend hours prepping for inspection, initialing forms at the end of the month, and verifying your compliance. Check out the
new way to document compliance with LACS versus the old paper way.
“You have to live and breathe this whole regulatory process & that’s what makes the Laboratory Assured Compliance Solution so helpful in being inspection ready all the time.” – ProMedica Clinical Lab Manager
Main Features
Technologists can easily mark tasks complete from tablets or desktop computers, reports are saved in real-time.
Get automatic updates about assigned tasks, and receive notifications to ensure every task gets completed on time.
Always have a clear view of your laboratories compliance and see tasks are being completed to assure a closed loop of quality assurance
Easily pull reports in seconds for each instrument, fridge, etc. and have peace-of-mind all checks have been completed.
Collect real-time data and store it systematically.
Inspect equipment status and access past records on mobile devices anywhere, anytime.
Allow lab technologists to inspect and report equipment malfunction quickly.
Communicate effectively with colleagues through faster response and resolution time.
“We had been using the same kinds of checklists and clipboards and notebooks for years. And here we were trying to be the cutting edge laboratory and be on top of our game and do everything we can to do things better, faster, smarter. We needed a better way to track all the tasks that needed to be done and be made aware if something was missed.” – Medical Technologist
Success Story: Microsoft video
There’s a better way to manage compliance in your laboratory, contact us today to
set-up a time to see how the solution works and take the next step towards joining compliance in the 21
st century.
Contact: Todd Borowski or visit our webpage for more information.
Our Commitment to You:
Kapios prides itself on the peace-of-mind it provides to customers. All the solutions are created by medical experts, ensuring that by the time the solution goes to market, it has been through extensive beta testing from the inventors themselves, and ready for the end user.
Our mission is to enable healthcare practitioners to provide exemplary patient care supported by sophisticated industry-inspired, field-tested technology solutions.
Who We Are:
At Kapios, we create technology because it is our passion. When we saw the far-too-many obstacles standing in the way of our healthcare providers, we knew we could help. We began to share our passion and create solutions to reduce the challenges in our healthcare community. We are using our technological capabilities to free them up to do what they do best.
In the end, we hope our love for technology will make a difference in the lives of those who need it most.
May 9, 2018 | Compliance, Legal, and Malpractice, Laboratory Hiring & Human Resources, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology
Supreme Court of India ruling may finally ignite a crackdown on illegal medical laboratories that operate without a licensed pathologist
What would happen if 80% of Americans did not trust the medical laboratories that run their diagnostic tests? What impact would that have on this country’s clinical laboratory and anatomic pathology industry? Certainly, a significant one.
Well, that’s exactly what has happened in India. A survey on graft in India’s healthcare system conducted by LocalCircles, a community social media platform, has highlighted citizens’ distrust and disgust with the nation’s pathology laboratories. Only 20% of the 29,000 citizens surveyed said they “fully trusted” the pathology lab they use, while 32% of respondents said they had received one or more incorrect pathology reports in the past three years.
In India, the term “pathology laboratories” describes what are called clinical laboratories in the United States and Canada. Histopathology laboratories in India perform testing on tissue, just as anatomic pathology and surgical pathology laboratories do in North America.
According to the survey results, 91% of respondents believe clinical laboratories should lose their licenses if found to be giving incentives to doctors for prescribing tests. In addition:
- 86% of those surveyed feel doctors’ earnings in hospitals should be unrelated to the value of tests they refer to the hospital’s pathology lab; and,
- 59% believed kickbacks from labs incentivized doctors to prescribe unnecessary tests.
“One of the important cogs in the wheel of the medical system in our country are the pathology labs,” LocalCircles noted in the survey results. “Being a high profit business, thousands of them have mushroomed in different parts of the country. Many people say these pathology labs have a tie up with the doctors and pass on a commission to the doctors for every patient they send to them.”
India’s Medical Laboratories Under Increasing Scrutiny
The LocalCircles survey underscores the ongoing concerns in India over the quality of its medical laboratories, which have come under fire for lack of regulations and accreditation standards.
In India, the term “pathology” describes a laboratory performing standard medical laboratory tests, such as chemistry, hematology, immunoassay, and microbiology. Histopathology is the term used to describe diagnostic testing that utilizes tissue specimens.
Last year we reported on the tens of thousands of lab companies that continue to operate in India without certified pathologists and other trained lab scientists. (See Dark Daily, “Shortage of Registered Pathologists in India Continues to Put Patients at Risk in Illegal Labs that Defy Bombay Court Orders,” April 12, 2017.)
Technicians Cannot Run Pathology Laboratories, Supreme Court of India Rules
There are signs, however, that the tide may be turning against unqualified pathology labs. Last year, The Supreme Court of India upheld a lower court order that directed only a “qualified and registered pathologist, with a postgraduate qualification in pathology” can countersign a patient’s pathology report, the Times of India (TOI) reported.
The TOI quoted an unnamed senior food and drug department official as saying, “Many technicians with [a] diploma in Medical Laboratory Technology and other equivalent qualifications are operating pathology laboratories,” because no laws currently exist requiring a qualification in pathology as a prerequisite for running a private laboratory.
“If unqualified people certify medical reports, it will hamper patient treatment,” Sadhana Kothari, MD, Associate Professor, Department of Pathology at Gujarat Cancer Society Medical College in Gujarat, India, told the TOI. “A doctor’s analysis and patient’s treatment [are] dependent on clinical tests. The Supreme Court judgment will ensure that illegal labs do not operate.”
Local press coverage like that above highlights the severe pressure India’s pathology laboratory industry faces following the Supreme Court of India’s ruling that only qualified and registered pathologist—with a postgraduate qualification in pathology—can run pathology laboratories or sign off on pathology reports. (Image copyright: VAPM Pathologists and Microbiologists Welfare Society.)
Illegal Labs Continue to Operate Despite India Court Rulings
The Supreme Court decision means that PhDs, laboratory technicians, and others without proper medical credentials can no longer sign laboratory reports. The Supreme Court verdict emphasized that labs operating without a qualified pathologist should cease operations until a qualified pathologist can be hired. However, earlier verdicts in the Indian court system have failed to end the proliferation of illegal labs.
According to the TOI, the Association of Practicing Pathologists (India) (APPI) first filed a writ in 1998 to prevent individuals not qualified in pathology and/or registered with the Medical Council of India from running laboratories. In 2010, the Gujarat High Court ruled, “Laboratory technicians are not pathologists and cannot run any laboratory independently.”
A month after the Gujarat High Court decision, pathologists in Gujarat complained the state government had failed to initiate criminal action against people running unauthorized labs. The Indian Express reported the Gujarat Association of Pathologists and Microbiologists was starting a public awareness campaign to stop illegal labs from operating because the state government had not shut down illegal operators.
Number of Qualified Pathologists Decreasing
The ruling by the Supreme Court of India, however, may result in concrete action being taken by the states. On February 6, 2018, the Pune Mirror reported the Maharashtra State Human Rights Commission (MSHRC) ordered the state public health department and the director of medical education and research to identify and take action against labs working without valid licenses.
According to the Pune Mirror, only 2,200 of the state’s 10,000 diagnostic laboratories are headed by certified pathologists. The Maharashtra Association of Practicing Pathologists and Microbiologists (MAPPM), the largest body of certified pathologists in the state, claims as many as 8,000 pathology labs in Maharashtra function without licenses.
“The state government has the mechanism to keep a tab on such labs, but they don’t take action,” Sandeep Yadav, MD, President of MAPPM, told the Pune Mirror. “It has become an easy way to earn money because there is no law yet around registering labs. Many people open laboratories simply by observing pathologists over time, and it could be a threat to a patient’s life, as it has been observed that many labs are illegal or run by technicians. The number of qualified pathologists is decreasing and genuine people don’t want to pick up the profession.”
Also in February 2018, the New India Assurance Company, the country’s largest insurer, instructed its regional offices to not approve medical claims from pathology laboratories if the reports are signed by unlicensed and unqualified staff, the Pune Mirror reported.
The challenges of providing first-line medical laboratory testing services in countries like India demonstrate how expectations of quality and accuracy are driving change in these rapidly-developing nations. It is a reminder to clinical laboratory managers and pathologists in the United States that the trust of patients and government regulators is a valuable asset.
—Andrea Downing Peck
Related Information:
Majority Say a Corrupt Nexus Exists Between Pathology Labs and Doctors
GAPM: Bogus Pathology Labs Playing with People’s Lives
State to Crack Down on Illegal Path Labs
Pathologists Start Awareness Campaign after HC Order
Pathologist Body Launches Campaign Against Rogue Labs
Insurance Major Says No to Illegal Lab Reports
Shortage of Registered Pathologists in India Continues to Put Patients at Risk in Illegal Labs that Defy Bombay Court Orders
Apr 23, 2018 | Compliance, Legal, and Malpractice, Laboratory Hiring & Human Resources, Laboratory Instruments & Laboratory Equipment, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Management & Operations
Critics are quick to note that this creates a disparity in how patients access healthcare services
Independent concierge care (AKA concierge medicine) is available to anyone willing to pay the additional costs, which are over and above any health insurance. In a concierge care medical practice, patients pay an annual retainer fee to gain increased access to doctors, specialists, and services, such as faster TATs on clinical laboratory testing.
Depending on the program, concierge care also can offer patients a range of “improved” healthcare benefits, including same-day appointments, extended appointment times, around-the-clock telehealth services, and the experience of receiving care from a physician with a smaller patient roster and in a more personalized manner.
Clinical laboratories and anatomic pathology groups might also find benefit from the concierge care model. Though some concierge providers bill insurance, most work on a cash basis with payment due upfront for services. This ensures prompt payment for any medical laboratory testing provided, reduces administrative overhead, and eliminates the need to deal with payers.
Concierge Medicine Is Not Just for the Wealthy Anymore
Since its inception, concierge care has been considered a luxury available to only financially well-off patients. However, that may soon change. Several major health systems and hospitals are piloting scaled-back versions of concierge care aimed at both middle- and upper-class consumers. However, the programs are not without critics and have elicited both positive and negative responses from healthcare providers.
According to Modern Healthcare, hospitals and health systems currently testing concierge care programs include:
Patients with busy schedules or chronic conditions may see the biggest gains from investing in concierge care. The added flexibility and increased access might allow them to take advantage of care options more frequently. Physicians being able to take their time during consultations and more closely focus on specific concerns is also seen as a benefit to patients.
However, Modern Healthcare points out that patients are not the only ones to see benefits from this arrangement.
“Doctors who have switched to concierge-style medicine sing its praises, claiming the smaller patient panel allows the doctor to build relationships with patients and spend more time on preventive medicine,” Modern Healthcare noted.
In 2016, Dark Daily reported on similar findings from the American Academy of Private Physicians (AAPP). They noted that the average primary care physician in the US maintained between 2,000 and 4,000 patients using the traditional care model. In contrast, the AAPP found concierge physicians maintained on average only 600 patients. (See, “Concierge Medicine Increases in Popularity as More Consumers Opt for This Care Model; Will Clinical Laboratories Exploit This Business Opportunity?” May 6, 2016.)
Paul Huang, MD, PhD (above right), a concierge doctor at Massachusetts General Hospital, told Modern Healthcare, “We are not doing this just to make more money—we are doing this to make money to put back into the mission of the hospital and to support programs that otherwise would be difficult to support.” (Photo copyright: Modern Healthcare.)
Concierge Care: Controversial Approach or Major Boon to Hospitals?
Since its debut in the 1990s, concierge care has faced scrutiny and opposition from those who feel it discriminates against those who cannot afford retainer premiums and out-of-pocket expenses.
One health system that has drawn such criticism is Michigan Medicine (MM), which is owned by the University of Michigan. As reported by the Detroit Free Press, in a letter to hospital administration, 200 of MM’s own doctors and staff expressed their feelings about the concierge care program, stating, “Victors Care purports to offer ‘better’ healthcare to those with enough money to pay a large access fee. The University of Michigan is a public institution and our commitment is to serve the public, not a private few. We do not feel this is the role of a state university and are unable to justify this to the patients and families we serve.”
Tom Cassels, a consulting partner with the Advisory Board Company, told Modern Healthcare, “It’s a cultural learning curve, because most not-for-profit health systems are geared toward providing the same level of service to everyone in their community. The fundamental model of concierge medicine is to price-discriminate.”
However, media coverage also highlights how the hospitals creating concierge care services are using the financial benefits to help offset the cost of low-margin services or provide care to low-income patients who wouldn’t otherwise have access to care.
Misty Hathaway, Senior Director of the Center for Specialized Services at Mass General, explained to Modern Healthcare that since their physicians are salaried, margins from concierge services can help support “things like our substance abuse program, or other parts of primary care where the margin is a little bit harder to achieve.”
Despite the ethical debates, use of concierge care services continues to gain momentum as middle and upper-class patients find the increased quality of care a worthy value proposition. As more options emerge at major healthcare centers, medical laboratories and other service providers might find that this trend also offers an opportunity to increase revenue with a minimal impact on administrative and billing costs.
—Jon Stone
Related Information:
Concierge Care Taking Hold at Some Large, Urban Hospitals
No Appointment? No Problem … For a Price
Exclusive U-M Medical Plan Buys You ‘Better’ Care, Special Access
The Future of Healthcare Could Be in Concierge Medicine
The Doctor Won’t See You Now
Concierge Medicine Increases in Popularity as More Consumers Opt for This Care Model; Will Clinical Laboratories Exploit This Business Opportunity?
More Doctors Consider Concierge Medicine as Healthcare Reform Looms
Concierge Medicine Trend Continues and Creates New Clients for Clinical Pathology Laboratories
Apr 20, 2018 | Coding, Billing, and Collections, Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing
Though ACA reforms may have slowed healthcare spending, rapidly increasing deductibles and cost sharing requirements have many experts questioning if patients can afford care at all, despite the increased availability of insurance coverage
Much of the debate surrounding efforts to replace and repeal the Affordable Care Act (ACA) has centered on premiums as a central facet of out-of-pocket spending. However, new data from a Kaiser Family Foundation (KFF) survey reveals that premiums are only one factor affecting consumers’ ability to pay healthcare bills. High-deductible health plans (HDHPs) are another culprit. This directly impacts clinical laboratories and anatomic pathology groups that find revenues down as more American’s avoid costs by delaying or opting out of testing and treatments.
The KFF report highlights both the complexity of managing healthcare costs and how the current focus on premium prices might miss other important considerations that make healthcare inaccessible to many Americans.
High Deductibles and Consumers’ Lack of Savings
An increasing number of insurance plans now include high deductibles—particularly in the individual markets, though employer-based insurance plans are experiencing steady increases as well.
This leaves consumers facing larger bills and making tough decisions about whether their healthcare is affordable—even with insurance.
When healthcare consumers cannot afford the out-of-pocket costs of healthcare, they are less likely to schedule wellness visits, adhere to treatments, or follow through on physician-ordered clinical laboratory tests they don’t consider essential to their well-being or simply cannot afford.
Even when they follow protocols and recommendations, that does not mean patients will be able to pay medical laboratories for tests performed, or anatomic pathology groups for specialized services, when the bill comes due.
The Ever-Growing Deductible Dilemma
In its 2017 study, “Do Health Plan Enrollees have Enough Money to Pay Cost Sharing?,” the KFF compares median data on liquid assets from 6,254 single and multi-person households—spanning a range of incomes and age brackets—to the average cost of both standard employer-based insurance and individual market insurance deductibles.
They further note that their data modeling and estimates present a “conservative estimate,” because chronic conditions might cause an extended period of out-of-pocket spending, and that median assets might not be available at a single time or throughout the year.
Concerning a previous 2016 KFF study on high-deductible insurance plans, the authors noted in a press release, “In 2016, 83% of covered workers face a deductible for single coverage, which averages $1,478. That’s up $159 or 12% from 2015, and $486 or 49% since 2011. The average deductible for workers who face one is higher for workers in small firms (three to 199 employers) than in large firms ($2,069 vs. $1,238).”
In the press release following KFF’s 2016 survey, Drew Altman, CEO (above), Kaiser Family Foundation, noted, “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.” (Image copyright: Kaiser Family Foundation.)
In their latest look at deductibles and out-of-pocket spending, the KFF study authors note, “About half (53%) of single-person non-elderly households could pay the $2,000 from their liquid assets towards cost sharing, and only 37% could pay $6,000, which … was less than the maximum out-of-pocket limit for single coverage in 2016. For multi-person families, 47% could pay $4,000 from their liquid assets for cost sharing, while only 35% could pay $12,000.”
This sets the stage for the grim picture now facing many Americans. Despite increased access to medical insurance, being able to use the insurance to obtain care can be a struggle for a sizeable part of the lower to middle class population.
Creating a More Affordable Future for Healthcare
Data from the Q1 National Health Interview Survey (NHIS) conducted by the Centers for Disease Control and Prevention (CDC) show that growth in high-deductible plans might skew these numbers further still. They found that the number of persons under the age of 65 enrolled in HDHPs increased from 25.3% in 2010 to 40.0% in the first quarter of 2016 despite uninsured rates dropping from 22.3% to 11.9% over the same period.
In the 2017 study, KFF outlines the complexity of the issue: “There are significant differences across the income spectrum … For example, 63% of multi-person households with incomes of 400% of poverty or more could pay $12,000 from liquid assets for cost sharing, compared with only 18% of households with incomes between 150% and 400% of poverty, and 4% of households with incomes below 150% of poverty.”
While there are no simple answers to address today’s increasing deductibles, KFF emphasizes the importance of looking at the bigger picture.
“Much of the discussion around affordability has centered on premium costs. A broader notion of affordability will have to focus on the ability of families,” they note. “To adequately address the issue of affordability of health insurance, reform proposals should be evaluated on the affordability of out-of-pocket costs, especially for low and moderate-income families, and be sensitive to the financial impacts that high cost sharing will have on financial wellbeing.”
In the meantime, lack of access to preventative care and regular checkups can increase long-term healthcare costs and health risks, creating a spiral of financial concerns for patients as well as the healthcare professionals and the clinical laboratories serving them.
—Jon Stone
Related Information:
The Biggest Health Issue We Aren’t Debating
Do Health Plan Enrollees Have Enough Money to Pay Cost Sharing?
Average Annual Workplace Family Health Premiums Rise Modest 3% to $18,142 in 2016; More Workers Enroll in High-Deductible Plans with Savings Option Over Past Two Years
Americans Are Facing Rising Out-of-Pocket Healthcare Costs—Here’s Why
Americans’ Out-of-Pocket Healthcare Costs Are Skyrocketing
Americans Are Shouldering More and More of Their Healthcare Costs
Medicare Out-of-Pocket Costs Seen Rising to Half of Senior Income
Consumer Reaction to High-Deductible Health Plans and Rising Out-of-Pocket Costs Continues to Impact Physicians and Clinical Laboratories
Because of Sizeable Deductibles, More Patients Owe More Money to Clinical Pathology Laboratories, Spurring Labs to Get Smarter about Collecting from Patients
Growth in High Deductible Health Plans Cause Savvy Clinical Labs and Pathology Groups to Collect Full Payment at Time of Service
