The strategy of pushing the first $1,200 or more of high-deductible health plan costs onto members in the form of increased deductibles has the potential to backfire. The plan design seems to have a built-in disincentive for seeking preventive care or managing chronic health conditions when health costs are lowest. Facing financial pressure in today's economy, plan members must decide if they will pay for a doctor's visit before the deductible is met, hope the health problem resolves on its own, or delay care. This is a "pay more later" gamble for the employer and employee.
A January 2012 study by Harvard researchers in the Journal of General Internal Medicine showed that families with high-deductible health plans tend to delay health care more than those with traditional coverage because of cost. Financially, high-deductible plans can strap families, according to the study. Those most at risk of having to make a choice between other necessities or needed health care are low-income families and those facing chronic health conditions.
Downside of high-deductibles
According to Med-Vision's health care database of large employer groups, 70% of plan members have low annual health care expenditures of only $350. Keeping those employees from "falling off the cliff" into costly health conditions is key to controlling costs. High-deductible plans often are accompanied by contributions from the company into employee accounts to help pay for deductibles and other medical costs with pre-tax dollars. The reality is that when the majority of employees have low medical expenses, companies are essentially pre-paying for medical claims that don't exist.
The risk of creating higher health care costs because of treatment delay is a threat that business leaders need to understand. According to the Centers for Disease Control and Prevention, more than three-fourths of national health care expenditures are from chronic conditions such as diabetes and heart disease.
Innovations for ensuring workers stay healthy in order to control medical costs and be members of a productive workforce are needed. Independent, member-centric databases that provide HIPAA-compliant information give a company's decision-makers unbiased data for practicing health risk and quality management. A Med-Vision analysis of an 8,000-member health plan showed that only 1% of members - 80 employees - were driving extremely high health costs. The sickest 80 workers had an average health cost of $87,000 - a huge difference from 40% of plan members who had average health costs of only $63. The 40% of apparently healthy workers with low medical costs should merit the attention of their employer. Encouraging those workers to stay healthy is a powerful method for controlling health costs.
Recent U.S. employer surveys indicate that 70% of companies will be offering high-deductible insurance by 2013. It's also estimated that half of U.S. employees will be in consumer-driven plans within 10 years.
Ross is founder and president of Med-Vision LLC and Med-View LLC. Reach him at (813) 244-4027.
