Alexandra E. Page, MD
The commercial market for health care has changed considerably in the wake of healthcare reform and the passage of the Affordable Care Act. Employers seeking to control costs are increasing deductible and copayments for employees; to deal with these higher out-of-pocket expenses, employees are seeking the highest value for their healthcare dollars, including such “value-added” services such as longer office hours, convenient locations, or other benefits beyond cost. The result has been a transition to “retail health care,” moving from the traditional model of patients with healthcare benefits to empowered consumers purchasing health care in a way that works for them.
Understanding these pressures on orthopaedic patients can help practices incorporate novel options and prepare for increasingly cost-conscious patient-consumers.
Consumer-directed or consumer-driven health plans (CDHP) are health insurance products with high deductibles, and are typically associated with health savings accounts. Although preferred provider organizations continue to dominate the employee benefit insurance market with 59.5 percent of employees, CDHPs are the fastest growing alternative, up 8 percent from 2012 and now accounting for approximately 20 percent of employees.
Results from an August 2014 survey by the National Business Group on Health (NBGH) support this trend. Based on responses from 136 of the nation’s largest corporations, “employers project their healthcare benefits costs will increase by an average of 6.5 percent in 2015. ... However, employers expect to keep increases to 5 percent after making changes to their plans, such as increasing cost-sharing provisions and implementing and expanding CDHPs.”
The NBGH further notes the transition to CDHPs as part of a trend toward broader worker engagement. Nearly three out of four respondents (73 percent) reported that they are adding or expanding tools to encourage employees to be better healthcare consumers. These tools can include education, shared decision making, and/or employee wellness programs.
Ideally, CDHPs push employees to seek appropriate, high-value health care, but the model could have unintended consequences, including reducing appropriate utilization of preventive care, selecting for healthy enrollees, and shifting sicker patients to more traditional plans. Patients with CDHPs are likely to emphasize price transparency. For example, they may push orthopaedists to explain the need for—as well as options for obtaining—ancillary services such as imaging, durable medical equipment, or physical therapy.
Domestic medical tourism
Medical tourism to India or Europe has increasingly been replaced with domestic alternatives. Several large, self-funded employers—including Walmart, Lowe’s, and Kroger—have contracted with centers that have demonstrated high value care for various high-cost elective procedures, including joint replacement and spine fusions. Websites and online newsletters direct patient consumers to options for domestic tourism.
One organization that fills this niche for very price-conscious patients is MediBid. Started in 2010 to appeal to self-pay and health savings account patients, MediBid charges fees to both patients and treating physicians. The patient requests a bid. Physicians may then bid to provide that care. If a bidding physician does not feel there is adequate information available, he can request more information or offer a bid for a consultation.
The contract exists between the patient and the physician and can range from a consultation (if the diagnosis is unclear) to specific imaging studies or a complete surgery package, including facility and anesthesia fees. According to MediBid, advantages to physicians include broader access to patients (including international patients) and ready cash flow. For patients, the program offers cost savings and transparency.
An article on MediBid in The Washington Post featured an orthopaedic example—a patient seeking affordable treatment for the “torn ligament in his knee.” In the article, the MediBid founder noted that 120,000 consumers have requested bids and 6,000 doctors or surgery centers have registered to bid on providing services.
However, such services have been criticized over possible concerns about quality and safety. In particular, the use of outpatient centers has been cited as a concern because they are “more lightly regulated than hospitals.”
“Insurance exchange” was the term originally used for the public system of purchasing federally subsidized insurance offered as part of the ACA. However, this system is now known as the “Health Insurance Marketplace.” In some situations, employers can transition employees to purchasing insurance in the Marketplace, but commercial insurance has had a similar product for years, which has been gaining in popularity.
Private exchanges are anticipated to grow rapidly and are part of the trend of shifting costs to consumers. This plan can appeal to employees by offering them greater choices and more control over their personal healthcare benefits.
Private insurance exchanges are frequently offered by large benefit providers, such as Aon-Hewitt, who noted in their 2014 report that one third of employers are considering moving to private exchanges in the next 3 to 5 years. Further, the report notes that nearly 60 percent of surveyed companies consider the model a good way to control long-term costs and transfer risk to the insurance carrier.
The NBGH survey offered a more guarded view of the growth of private exchanges, noting “only 17 percent [of respondents] are confident that exchanges do a better job of engaging employees in better healthcare decision making and only one in 10 believe exchanges will control costs better than their own plans.”
Alexandra E. Page, MD, chairs the AAOS Health Care Systems Committee. She can be reached at firstname.lastname@example.org
Editor’s Note: This is the second article in a series updating recent trends in delivery and payment strategies in the retail healthcare market.
2014 UBA Health Plan Survey
U.S. Employers Changing Health Benefit Plans to Control Rising Costs, Comply with ACA, National Business Group on Health Survey Finds