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Friday, March 29, 2019

Rethinking Patient "Skin in the Game"

Health-costs-stockAs policymakers consider ways to address the high costs of health care, they would do well to refine the use of policies that give patients more “skin in the game.” Under a common view, health care costs are driven up by people who seek unnecessary care because insurance picks up the tab. By raising deductibles and co-payments, it is thought, people will think twice before going to the doctor’s office or the emergency department.

So deductibles and co-payments have risen considerably in recent years, and many more Americans have high-deductible plans with health savings accounts. But lay people aren’t so good at distinguishing between necessary and unnecessary care, and many will refrain from getting care when they need it. Some patients also will cut back on their medications. While simply raising patient cost-sharing hasn’t worked well, there are good ways to target financial incentives for patients.

For example, the Affordable Care Act eliminates cost-sharing for important preventive care, such as flu shots and colon cancer screening. Some insurers have adopted “reference pricing” for non-urgent, expensive surgeries, such as joint replacements. With reference pricing, the insurer reimburses the full cost of a high-quality, low-cost hospital, and the patient pays the difference when using a higher-cost hospital.

Chris Robertson has proposed another valuable approach. Instead of applying a $3,000 deductible to all family policies, a health plan would calculate the deductible as a percentage of income, say 2 percent. A family with a household income of $30,000 would face a deductible of $600 while a family with a household income of $300,000 would face a deductible of $6,000. This not only would be fairer, it also would make for better health. The problem of patient cost-sharing discouraging people from seeking necessary care is seen with lower-income patients. Something similar already occurs with health insurance premiums. Employers often vary the employee share of the premium based on income.

Even more important than refining patient cost-sharing is to focus more on physician behavior. Health care costs are determined much more by the decisions of doctors than those of patients.

Posted by David Orentlicher on March 29, 2019 at 07:54 AM | Permalink

Comments

Hi,

What evidence do you have that your ways are "good ways to target financial incentives for patients?" I've tried, repeatedly, to get a quote for service (not a procedure, but the whole experience, walk-in to walk-out). I've never succeeded. Many patients only have access to a single health care provider. I live in a major metro area, but my health insurer only has doctors who can take new patients at one provider (Kaiser)

Claims that patients can and should shop need to be carefully checked before they inform policy.

Posted by: Joe Patient | Mar 29, 2019 3:13:01 PM

Just worth to read in this regard ,the latest brief of the White house( issued on : March 28 )titled as:

" Statement from the Press Secretary on Democrats’ Plan for a Government Takeover of Healthcare "

Here:

https://www.whitehouse.gov/briefings-statements/statement-press-secretary-democrats-plan-government-takeover-healthcare/

Posted by: El roam | Mar 29, 2019 2:36:56 PM

Interesting and creative I must admit ( that research of Christopher T.Robertson). Not only improving the health care as such, but that author of that related article, also focuses on greater or broader positive implications on the economy. For example I quote:

Moreover, SCS promises to deliver better health outcomes and enhanced worker productivity for each dollar spent on health insurance.

Or:

Managers responsible for designing the firm's insurance policy are paid more than the median worker, which may cause them to reject SCS even if it would improve profits for the shareholders.

End of quotation:

So, concentrating upon the economy as a whole, and not only the narrow aspects of insurance policies, is really novel and creative. Let alone,while according to him such SCS is permissive by the law.

Thanks

Posted by: El roam | Mar 29, 2019 12:01:16 PM

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