Cost-sharing growing faster than premiums
September 14, 2014
At DocSpot, our mission is to connect people with the right health care by helping them navigate publicly available information. We believe the first step of that mission is to help connect people with an appropriate medical provider, and we look forward to helping people navigate other aspects of their care as the opportunities arise. We are just at the start of that mission, so we hope you will come back often to see how things are developing.
An underlying philosophy of our work is that right care means different things to different people. We also recognize that doctors are multidimensional people. So, instead of trying to determine which doctors are "better" than others, we offer a variety of filter options that individuals can apply to more quickly discover providers that fit their needs.
September 14, 2014
The Kaiser Family Foundation released a survey about employer health benefits. On the positive side, annual premiums rose by only 3%, costing an average of $6,025 for individuals and $16,834 for families. Less positive news for the employee is that the average deductible (for plans with a general annual deductible) rose about 7%. In addition, the percentage of employees who have deductibles of $1,000 or more rose from 38% to 41% (nearly 8%). The statistics hold over a longer time period: on average, premiums rose about 25% since 2009, while the deductibles (among the plans that had one) rose more than 47% and the number of employees.
This isn't surprising to anyone following the industry. Cost-sharing is one important factor in slowing the growth of premiums. From the employers' perspective, a rise in premiums mean paying more for everyone who is covered. A rise in deductibles, however, only affects people who use medical services. So, the idea is that employers can avoid a larger increase when paying for everyone by allowing a smaller number (sometimes, much smaller) of employees pay for the first $X of health care expenses (where $X is the deductible). The tradeoff between premiums and deductibles also makes sense for the insurers in that they know that individuals will be less likely to consume health care services knowing that it is the individuals themselves that will pay for the initial coverage.
This shift in costs to the individual will result in a more sophisticated consumer of health care services. For example, now that they are more likely to be responsible for their costs, individuals might start asking "is that test (or procedure) really necessary?" Individuals will also likely start considering the different prices that different providers charge, starting with services that are considered routine (e.g. flu shot or MRI).
September 06, 2014
One bright spot in the area of health care transparency in the US is that the Department of Health and Human Services (HHS) has published a variety of quality metrics for hospitals via their Hospital Compare and in database files. From fairly early on in DocSpot's history, we have re-published data from HHS, trying to make it easier for consumers to interpret. Last year, we even worked hard to integrate procedure pricing information from HHS. This summer, we updated our user interface to find out more about hospitals, and we even included a new feature to help people compare hospitals to other hospitals that are near it.
To try this out, search for "hospitals" and click on the compare button. If you are interested in finding out procedure pricing information, you can first visit a hospital's profile page, click on the pricing tab, and click on a specific procedure name to find out more. There's a button to compare nearby hospitals. If you have any feedback, please let us know.
August 30, 2014
Dr. Sandeep Jauhar offers an interesting historical review of how America's medical system evolved over the last several decades. There are many different facets to the review, but one of the prominent themes that jump out at me is the effect that incentives have on behavior. For example, I was surprised to learn how inflation-adjusted salaries for doctors grew five-fold over thirty years. This rapid rise in compensation coincides with the rise of the employer-funded health insurance. That is, as patients became increasingly divorced from the cost of their health care, health care costs rose. That sounds like it should not surprise anyone, but instead of addressing the problem directly by meaningfully involving patients via cost-sharing, the industry moved towards health maintenance organizations (HMO) to help rein in costs via regulation (e.g. insurer reviews of medical services). Likewise, the industry pricing model has largely been fee-for-service, where doctors are paid by procedure volume. It shouldn't be surprising, therefore, when doctors order unnecessary tests (lamented, for example, by a physician who posted on Sermo). This trend also seems like it would have been curtailed with consumers sharing more of the costs (e.g. "is that CT scan really necessary?").
The sustained rise in health care spending has forced the industry to push more costs onto the consumers. As painful as the transition might be, linking costs with the decision-maker (the patient) seems like one of the few viable methods of meaningfully slowing down health care costs for the long-term. As consumers make better choices when selecting among several options with differing quality metrics and prices, the overall system will become better and more affordable. For consumers to make better choices, however, they will need tools and access to data.
August 23, 2014
Behind the scenes, we've continued our efforts to improve this site's user interface and those of you who have visited recently might notice that the search results page is different now: we've collapsed the filters into a menu bar. Filters are an important way of helping users find doctors according to specific criteria, so we're keeping them. At the same time, the old filter area would push the search results down quite a bit, so that the search results wouldn't necessarily be visible "above the fold" on a smaller screen.
We'll continue to work on our page layouts (including making the page more responsive). If you have any ideas on what we should prioritize, please let us know.
August 17, 2014
A number of signs point to increasing transparency within the realm of US health care, especially in terms of pricing. As the cost of health care continues to increase above the rate of inflation, employers have been shifting costs onto their employees -- via less subsidy for premiums, higher co-pays, higher co-insurance, and/or higher deductibles. As employees realize that their decisions have serious financial consequences, they will become more informed and engaged. As they continue to ask for pricing information, such information will (eventually) become more available. The journey, however, isn't always smooth. Modern Healthcare published an article about how doctors are finding that an increasing portion of their time with patients is spent discussing financial matters, and that patients will sometimes push for less effective tests or treatments in order to save money.
This is an indication that financial considerations are becoming more important to the patients (who, up until relatively recently, could often rely on their insurance companies to cover most of the bill). With doctors starting to complain about figuring out costs, maybe more insurance companies will move faster in unveiling easy-to-use cost calculators.