Los Angeles Times Examines Consumer-Driven Plans’ Lack of Information on Prices
The Los Angeles Times on Monday examined how U.S. residents enrolled in "consumer-driven" health plans -- which supporters maintain can help reduce health care costs because they force members to "comparison shop" for medical services -- might lack adequate information to make such decisions. According to a June survey of 1,400 employees enrolled in different health plans conducted by employee benefit consulting firm Towers Perrin, more than 80% of respondents said that they required more information on prices for their out-of-pocket health care expenditures. "Right now, there's no Shopzilla for an angioplasty," Patti Smith -- head of Adobe Group, a California-based health care communications firm -- said. Many health care providers "have been resistant to disclosing prices and often bristle at efforts to determine quality," and many patients do not ask, the Times reports. "You can ask about prices, but even then because of the emotion involved in health care, people tend not to ask -- and in an emergency situation, forget about it," Mike Fox, a managing principal who specializes in health care at Towers Perrin, said. He added, "It's very difficult for people to turn to a doctor and say, 'Hey, for 50 bucks cheaper I can get this down the street.'" Some health insurers, such as Aetna, have begun to disclose payments negotiated with providers on their Web sites to help address the issue, and the California HealthCare Foundation this week plans to release the results of a study in which researchers visited 64 hospitals statewide and asked for the prices of different procedures (Vrana, Los Angeles Times, 12/11).
Medical Credit Cards
The Los Angeles Times also on Monday looked at credit cards that can be used only to pay for health care services. A number of different companies and organizations -- including Kaiser Permanente, Citibank and GE Capital -- offer medical credit cards with a variety of options and interest rates. For example, Kaiser last year began offering medical credit cards with a $5,000 limit to customers in Hawaii and Colorado, and it is considering expanding the program to other states. Benefits of such cards include easily obtained procedures and tests "when they're most needed," as well as a potential reduction in unpaid bills to hospitals, the Times reports. The cards also "can help patients meet their deductibles and other out-of-pocket expenses, obtain elective surgery, even help pay for care that might otherwise be off-limits," according to the Times. However, some consumer advocates worry that the cards, which carry interest rates as high as 23%, could increase consumers' medical debt. Interest rates on hospital payment plans are usually very low. In addition, "patients who are offered credit cards may be less inclined to pursue other payment alternatives," such as charity care, the Times reports. Health care experts say medical credit cards and other new financing options will become more popular as health care costs and the number of uninsured patients continue to increase. Such cards "were once a trickle issue," but it's turned into a steady business that could soon become a flood," Mark Rukavina, director of the Access Project, said (Costello, Los Angeles Times, 12/12).
Related Broadcast Coverage
Two broadcast programs recently aired commentaries on the use of health savings accounts:
- Henry Aaron, APM's "Marketplace": High-deductible insurance plans with health savings accounts are "not a magic bullet" as they can be designed badly, but well-designed plans "can help slow the growth of health care spending and help workers too," Aaron, a Brookings Institution senior fellow in economic studies, says in a commentary on "Marketplace" on Thursday. According to Aaron, "poorly designed" high-deductible plans can have the "perverse effects" of allowing insurance companies to "cherry pick" healthy participants, offering "unaffordable premiums" to the chronically ill and elderly and potentially leaving people "unable or unwilling to spend money on the care they clearly need." Aaron says "it all depends on how you structure" the insurance plan, citing his experience with a high-deductible plan at a medium-sized company. According to Aaron, the high-deductible plan worked because it was optional, workers retained group coverage, savings from the plan were shared, preventive care remained available without charge and the company deposited enough in the HSA so every employee who participated would be "better off financially, whatever their health" (Aaron, "Marketplace," APM, 12/8). The complete segment is available online in RealPlayer.
- Glenn Hubbard, PBS' "Nightly Business Report": "Simple" tax changes could reduce annual health care spending and the number of uninsured U.S. residents, Hubbard, dean of Columbia University's Graduate School of Business and former chair of the Council of Economic Advisers, says in a commentary on "Nightly Business Report" on Monday. According to Hubbard, expanding HSAs is "unlikely to be costly" and allowing everyone with health insurance to deduct out-of-pocket expenses would shift medical costs from insurance plans to consumers, who would receive higher wages. "Let's hope the tax reform and health reform discussions come together soon," Hubbard concludes (Hubbard, "Nightly Business Report," PBS, 12/12). The complete transcript is available online.