Aug. 29—More than one in five large employers are expected to offer only high-deductible health plans next year, according to a recent survey—and the trend is having a growing impact on hospitals.
The rate of large employers offering only plans with high deductibles is expected to reach 22 percent of large employers in 2014, up from 19 percent this year, according to the latest employer survey by the National Business Group on Health. Additionally, nearly three-quarters of employers (72 percent) offer at least one such plan, which pair high deductibles and low premiums with health savings accounts.
The Impact on Hospitals and Purchasers
The growing trend toward high-deductible health plans has implications for both patients and provider organizations, said James Landman, director, thought leadership initiatives for HFMA.
"Patients’ exposure to most of their healthcare costs will likely intensify demands for greater transparency on price and quality data as patients seek to identify high-value providers," Landman said. "Provider organizations may also face billing and collection issues relating to the patient’s deductible."
He urged hospitals to consider their ability to provide point-of-service estimates for care, financial counseling services, and clear, patient-friendly communications with patients regarding their financial responsibilities.
Zac Stillerman, executive director, revenue cycle solutions for The Advisory Board Company, said many hospitals are seeing an increase in patients with such plans, and that’s driving increases in their bad debt, as patients only realize after treatment that they are responsible for such a large share of the cost of care.
Despite an increasing share of patients with such plans—one-third of U.S. workers, according to some estimates—many hospitals remain wary of addressing the plans’ increased costs with patients before non-emergency care is provided. But Advisory Board research indicates patient satisfaction can increase if quality counseling is provided in advance, Stillerman said.
"There is still a premium on being able to explain to patients why they are being asked to pay what they are," Stillerman said in an interview. "Not that many hospitals have had to do that in a world the majority of their payment is coming from payers."
The extent of the impact of high-deductible health plans on hospitals was underscored by the August jobs report by Challenger, Gray & Christmas, which cited growing use of the plans as one of the factors behind July’s loss of 6,843 healthcare jobs.
"Hospitals are also reporting fewer patients, as high-deductible insurance policies discourage would-be patients from seeking health services," John A. Challenger, CEO of Challenger, Gray & Christmas, said in a release describing their August jobs report.
The reluctance of high-deductible plan patients to seek care is among the variety of potential problems such plans can present for providers and consumers. An August Health Affairs study found among low-income enrollees in high-deductible plans reduced their high severity use of emergency departments (EDs) by up to 30 percent over two years, and their hospitalizations declined by 23 percent in one year before rising again. Similarly, a study in the August issue of Medical Care found fewer ED visits for men—even for "high severity" conditions.
But the news is not all bad for high-deductible plans. The latest insurance enrollee survey by the Employee Benefit Research Institute reported Aug. 28 that overall satisfaction with such plans continue to increase (37 percent in 2006 to 48 percent in 2012) —likely because of their lower premiums. However, dissatisfaction with higher out of pocket is likely behind such plans’ comparatively low overall popularity compared with traditional insurance plans, according to Paul Fronstin, director of EBRI’s Health Research and Education program and author of the report.
For instance, 44 percent of traditional-plan participants were extremely or very satisfied with out-of-pocket costs for healthcare services other than for prescription drugs, while only 18 percent of high deductible plan participants were similarly satisfied.
The impact from the use of high-deductible plans will likely grow in future years as employers view them as the single most effective way to control healthcare costs. In the NBGH survey, 43 percent of employers cited the use of such plans as the most effective tactics they had implemented to control costs. That employer interest is likely to be compounded by the appeal of such plans to low-income enrollees in the health insurance marketplaces created by the Affordable Care Act and set to launch in 2014.
"That could be the catalyst for more changes, in terms of utilization," Stillerman said.
Publication Date: Thursday, August 29, 2013