Solution to Rising Healthcare Costs
are soaring. After many failed attempts to control these costs,
it’s time to rethink the word “healthcare” by putting more emphasis
on health and less on care. A paradigm shift is needed, and this
starts by seeing ourselves as consumers of healthcare who are in
control of what our dollars purchase, and not as patients who
passively accept what’s offered by physicians or an employer’s
Consumers have a big role in getting healthcare spending under
control, but most healthcare users don’t understand how their
choices have contributed to the current challenge. They don’t
understand the true costs of their lifestyle choices and the impact
those choices have on the cost of healthcare.
Did you know that
from 1998 to 2004, the average cost of an abdominoplasty (tummy
tuck) rose by 19%, only slightly faster than the rate of inflation?
By comparison, per capita healthcare spending increased by 49% over
that same period. A tummy tuck is an elective surgery not covered
by insurance; those who decide they want or need the procedure pay
for it out of their own pockets. Because it’s their money they’re
spending, they’re unlikely to make frivolous decisions—they won’t,
on a whim, run to a plastic surgeon to undergo a costly and invasive
procedure without first doing their homework. Medical procedures
paid for with consumers’ hard-earned money are carefully researched,
considered, and weighed against other options. It’s what an informed
healthcare consumer does.
In contrast, most
consumers are unaware of the actual costs of the healthcare services
covered by their insurance plans. When billing and payment are
arranged between doctors and insurance companies, consumers don’t
think twice about going to the doctor or getting a prescription
filled. For most consumers, it’s just a co-pay.
Simply put, when
there isn’t a “real cost” associated with medical care, consumers
won’t take the time to consider the cost or whether they really need
the service they’re seeking – this kind of behavior leads to
unnecessary use of healthcare and drives up cost.
The difference between using traditional managed-care techniques to
reduce costs and helping consumers monitor their own behaviors and
healthcare spending is driven by one major factor: motive.
Consumers are focused on saving money, especially when it’s their
own. Their focus on money is tempered by attention to their health.
By becoming better informed about the care they receive and the
lifestyle choices they make every day, consumers not only avoid
using the system unnecessarily but also guarantee their health is
the #1 priority for them and their families. That mindset benefits
their employers and the insurance companies underwriting their risk.
A New Approach:
Consumer-driven health plans (CDHP) are health insurance plans that
combine a lower premium, high deductible health plan (HDHP) with a
healthcare account. The tax-preferred money contributed to a
healthcare account, combined with some out-of-pocket expenses,
covers healthcare spending up to the amount of the annual
deductible. This health insurance solution is highly effective
because of its philosophy, which is governed by three principles:
transparency, responsibility, and opportunity.
In a traditional health insurance plan, a consumer goes to a health
services provider without considering the visit’s cost. In most
cases, all the consumer pays toward the cost of the service is his
or her co-pay. The inherent design of this health insurance product
hides the rest of the cost from the consumer. Without knowing the
true costs, consumers have no incentive to consider their options
and choose the most appropriate, cost-effective treatment.
comes responsibility. Consumers have a responsibility to live a
healthy lifestyle and mitigate health risk issues (i.e., diet,
exercise, sleep and stress). They also have a responsibility to
understand the value of the health services they receive – it’s up
to them to make informed decisions about how they use them and
carefully consider their options in a non-emergency situation. A
responsible decision about using health services could be as simple
as speaking to a nurse or taking a day off work to rest instead of
making a trip to the doctor. In most cases, consumers can access the
health insurance company’s nurse help lines for medical advice
instead of going to the emergency room for non-emergencies. The help
lines are staffed by registered nurses specifically trained to
answer symptom-based questions and provide guidance.
The CDHP and Wellness solution comes with opportunities for the
consumer to benefit physically and financially. Beyond improving the
consumer’s health and general well-being, participating in a CDHP
and Wellness plan offers significant financial advantages to the
consumer in the form of unused dollars, which can be carried forward
for future healthcare expenses.
Gaunya is a principal at Borislow Insurance and an employee benefits
advisor with over 20 years of experience in the employee benefits
industry. He is a pioneer in the consumer-driven health plan space
and passionate about its ability to revolutionize the healthcare
industry. Marc has been quoted and published regionally and
nationally and is the co-author of Bend the Healthcare Trend.
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