The use of population health management and high-deductible health plans is on the rise, but the convergence of these trends is like mixing oil and water. High-deductible plans are popular because the premiums are lower. The healthcare industry often refers to them as “consumer-driven health plans,” with the idea that consumers will shop around for the best and most affordable healthcare if they have skin in the game.
But it’s not exactly happening that way. Recent studies indicate that many members of high-deductible plans don’t shop around. Instead, they tend to avoid medical care because of the deductibles, and this leads to even higher costs later owing to more emergency-room visits and hospitalization.
"What's happened is that there are people saying now that they can afford the insurance, but they can't afford the health care,” says Joel Allison, CEO of Baylor Scott & White Health, the largest health system in Texas. Allison made this observation in October while visiting the health system’s hospital in Bryan, Texas, according to the Bryan-College Station Eagle.
So what does being able to afford healthcare have to do with population health management? The goal of population health management is simple: to improve the health of a group of people. But its success depends on the members’ cooperation. For example, one aspect of population health management calls for using data analytics to identify and reach out to patients with chronic diseases. But all the fancy analytics in the world won’t do any good if the patients can’t afford the cost sharing required for the recommended office visits or medical procedures. Seventy percent of emergency physicians regularly see patients who have delayed care because they cannot afford the high deductibles and copays of their insurance plans, according to a survey conducted in September by the American College of Emergency Physicians.
A Commonwealth Fund survey last fall showed that 40 percent of people who had health insurance with deductibles amounting to 5 percent or more of their incomes chose not to visit physicians or get medical tests when they were sick. Yet spending more on the front end can reduce overall medical expenses. A study by Precision Health Economics, presented to the American Diabetes Association this summer, found that patients with type 2 diabetes who were most adherent to their prescription drug regimens had higher annual pharmacy costs compared with those who were least adherent: $4,839 compared with $3,046. But overall annual medical expenses for the most adherent patients were almost one-third of expenses for those who were least adherent: $7,692 compared with $21,421.
Adoption of high-deductible health plans and population health management is likely to increase. Saving money on premiums will keep high-deductible plans popular. And more providers will make population health management a top priority as they move from fee-for-service to value-based reimbursement.
What’s the solution? Value-based insurance design is a promising place to start. The Centers for Medicare & Medicaid Services is trying value-based design in Medicare Advantage plans, and some employers with self-funded health insurance are offering benefits with such features as no copays for treatment of chronic conditions.
Rethinking the merit of high-deductible plans would be even better. For employers, it makes sense to look beyond short-term costs and consider the actual impact rather than the intent of HDHPs. And for individuals, it makes sense to accept that plans with low premiums and high deductibles today may result in much higher costs in the future.
Follow Deborah White on Twitter @DeborahWhiteDRG