High Deductible Health Plans are Impacting Your Clinic


Feeling like you are on top of the issues impacting your clinic aren't you?  HIPAA, MU1, PQRS.  You've prepared. You have worked with your vendors and providers and have successfully navigated these issues.

What about ACO's, Medical Homes and ICD10?  You are on top of those too aren't you?   Been there. Done that. You even prepared for ICD10 but were ever so glad that the Feds pushed that one out another year. Let’s hope they keep pushing!!

So what about high deductible policies. You might say, “What?  That's not my problem, is it?”  Yep. High deductible policies absolutely are impacting your clinic.  Let’s take a look at what they are, why we have them and their impact to Quality.

First, what is a high deductible policy?  The definition can vary, but the Internal Revenue Service sets the minimum threshold for an HDHP (High Deductible Health Plan) at $1,250 for an individual and $2,500 for a family. Often those types of insurance plans are paired with a health savings account, funded either by the member or the employer.

Becoming Pervasive!

According to NPR, in 1996 only 10% of healthcare policies in place had high deductibles. Today, 1 in 3 policies have high deductibles and that number is growing. These policies push utilization decisions to the kitchen table. Think families won't postpone medical care because they will be required to pay out of pocket significant sums of their families healthcare tab?  You'd be wrong. Dead wrong.

Employers and families are struggling under the ever increasing financial burden of healthcare.  The rising cost of health insurance premiums for employers — up 131 percent in the last decade, to an average $13,375 per year for family coverage, according to the Kaiser Family Foundation — has led to an equally sharp increase in worker contributions to those premiums —up 128 percent in the last decade, to $9,860 a year.

HDHP seems to be a win for the employers.  They love these policies.  A survey by Towers Watson, published this year, found that firms with at least half of their employees in an account-based health plan (which typically includes a high deductible) spent $1,000 less per employee than companies without this type of health insurance plan.  High-deductible plans have the potential to yield massive spending reductions in healthcare. A study published last year by researchers at the RAND Corp., the University of Southern California and Towers Watson predicted a drop in annual healthcare spending of $57 billion if high-deductible plans are taken up by 50% of employers.

Impact to the Healthcare Consumer

Patients though, tend to make healthcare cuts across the board.  Since a famous RAND Corp. study came out more than three decades ago, it has been well documented that out-of-pocket expenses influence people's health choices, and not always in a positive direction. High deductibles lead people to cut back on both less effective services and on interventions that matter.

The irony of course is that we're in the midst of radical changes towards payment for quality. According to Modern Healthcare, a growing number of experts fear erecting high deductibles on the path to healthcare could backfire by undermining moves to save money through encouraging high value services.

The high-deductible health plans are working against what we're trying to do in the accountable care movement, which is to eliminate barriers to access to physicians, particularly primary-care doctors, and to eliminate barriers to prevention and wellness,” said Dr. David Shulkin, president of the Atlantic Accountable Care Organization, a group of hospitals and doctors in New Jersey that coordinates patient care. “This can be potentially harmful to us.”

There is at least one positive impact of HDHP for healthcare consumers.  “High-deductible plans promote engaged consumerism”, say Shulkin of the Atlantic ACO, saying “if we want to improve, we need to have patients highly educated and engaged in their own healthcare.”  But in that ideal world, patients would cut back only on unnecessary services and marginally beneficial interventions and not avoid the care that matters. Unfortunately, that isn't always the case.

“In general, people make cuts across the board,” said Dr. Alison Galbraith, an assistant professor at Harvard Medical School and the Harvard Pilgrim Health Care Institute. “They don't make a distinction between high-value and low-value care.” 
Here, the compatibility between ACOs and high deductibles starts to fray. “What the high-deductible health plans do is they very effectively address the cost of care, but they don't have a positive impact on the quality of care or on access,” Shulkin said.

Get Prepared!

So how can we overcome these challenges? First, be aware. Is this trend already showing up at your office?  Are visits trending down?  An Accenture article predicts that the number of walk-in clinics may double in the next 3 years.  Are you losing patients to these competitors?  How will you compete against them?

Are your patients showing up sicker because they are waiting to come to the office until they absolutely must?  Will this impact wait times and patient satisfaction? 

On the financial side, practices are much better at asking for payments in advance but what can you do for those families that are in genuine need of assistance?  Can you develop payment plans to accommodate these families? 

Consider all of the implications of HDHP to your practice and develop a plan for success. 

Welcome to the new world of high deductible healthcare!