The rise of medical tourism indicates that may patients no longer care about a physician’s education pedigree, nationality or color of the doctor’s skin. Changing provider preference can also be seen with in the increasing numbers of nurse practitioners writing prescriptions. CVS, Walmart and other drug store chains are hiring these practitioners because they attract customer-patients (who want to avoid doctors’ waiting rooms) into their stores and steer business to their pharmacy counters. Today’s patients, it would seem, no longer care if they see a physician so long as their medical problems are solved. In fact, judging by the transient success of mydoc.com (which connected remote patients to an on-line board certified internist who wrote prescriptions over the internet), patients no longer care if their provider is appropriately licensed.

So suppose Federal Express goes into the health care business. Federal Express could hire physicians in Bangalore to operate a website. These physicians would listen to patients’ histories and do limited examinations of the patients via a web video camera. (Such cameras are now affordable by most people who own a computer.) After making a diagnosis the doctor would write a prescription and charge the patient one-tenth of what an American physician would charge. The Indian physicians would be happy because they would operate at a higher volume. The American patient would be happy because they would spend less out-of-pocket HSA funds and avoid having to wait to see a doctor. Finally, Federal Express would be happy because it would make money delivering the needed medication to the patient by the next morning. (Perhaps by have the drugs ship from Canada.)

In short, in a global market for health care services the regressive nature of HSA-high deductible insurance does not necessarily mean that patient will forgo needed medical care.

First, $5,000 HSA deductibles are not allowed under current law, nor are $5,000 HSA contributions. the maximum deductible for an individual in 2007 is $2,850. That is also the maximum contribution (plus an $800 “catch-up” contribution for people age 55+). So Remler and Glied’s hypothesis is actually at the high end of the possibilities.

Next, their hypothetical PPO coverage of $350 deductible with 20% coinsurance to an OOP max of $1,800 is at the low end of the spectrum for PPOs. The most recent KFF/HRET survey places the average PPO deductible at $473 for an individual. (It also found the average HDHP with a savings account deductible was $1,715, btw)

Further, the KFF/HRET survey reveals many cost-sharing provisions in PPOs that few analysts pay attention to — flat dollar physician visit copays with no OOP limit, per-admission hospital deductibles, per diem hospital copays, etc.. It also found that 21% of workers have no maximum on their OOP costs, and only 54% have a maximum below $2,000.

I don’t remember if Remler and Glied include premiums in their calculations. If they don’t, they should. There is a basic trade-off here — higher OOP = lower premiums and vice versa. Ain’t nothing magical about it.

Other than that, I agree with your conclusion that the particular mixture of deductible, coinsurance, and OOP limit (and premium) one pays “is a matter worth further study and thought.” And that there are additional approaches that are worth throwing into the mix, such as basing contributions on financial need or on risk.

Let’s try it all out and test empirically what mixture produces what results.

Once we’ve done that, let’s let individual families decide what combination works best for them.

Greg Scandlen
President
Consumers for Health Care Choices

And Matthew Holt highlights Reinhardt’s post and the HSA debate on The Health Care Blog.

The carrier I want to bring in says it’s not worth the risk to bid on this older group without the younger healthier set, and I must say, if one looks at a calculator, there’s sense to this. By the way, we are not talking HSA here. The majority of employees are blue collar or have that mentality, and so we’re looking at HMO type plans with relatively low copays.

What appeals to me about Prof. Reinhardt’s ideas (well, I like a lot of them) in this instance is the idea of subsidies provided for those with chronic illness. Could these subsidies be tied somehow to cost-control on the provider side, as well as to some lifestyle management component on the patient/consumer side? I realize that this shared responsibility stuff is all the rage, and in spite of the one or two studies that are touted, find this kind of blame-the-victim mentality is not much more to be admired than the New Age California philosophy that implies if we don’t control our thinking in a positive manner then we deserve our illnesses.

Still, there could be some benign work to help people with chronicities, or those in danger of same, to make what lifestyle changes would be amenable and affordable in a culturally appropriate manner.

Would appreciate any comments or suggestions you might offer in this vein, also, is there any possibility of turning this group into a study, since there are likely to be several carriers offering different designs?

One more thing: In CA there is no such thing as embedded HSAs. Therefore a single mom with a child purchasing a Family plan with a $2400 deductible would be subject to a $4800 deductible before anything beyond the one-time well-check would be covered.

I always write the mom on her plan and take the child out, presuming the child is healthy enough to pass underwriting, putting him/her on the lowest affordable deductible, and out-of-pocket maximum. Co-pay is not such an issue as a healthy child will not have many doctors visits, whereas if the child has one hospitalization, or even a costly emergency room visit, s/he is likely to use the entire deductible and soon reach the out-of-pocket maximum.
If all providers are in the network (and there are often surprises that cannot be controlled – the surgeon one expected is out when surgery needs to be scheduled, or the anasthesiologist doesn’t accept assignment) but IF all providers are in network, and other costs fall under “usual and customary” then the plan begins to pay 100%.

However, if we could have embedded deductibles, then those who could benefit somewhat by opening a Health Savings Account could have the separate deductibles, and the tax perks.

that’s my 2 cents. Very helpful insights for a complex problem.

Bett Martinez, M.Ed., Broker CA Lic#-0794317
well-being@pacbell.net; 510-526-0312