Employers are prodding patients to pay more of their healthcare bill, hoping they will question healthcare expenses, seek more information on practice quality and perhaps be less loyal to their physicians.
Some physician leaders don't know what to make of this consumer-driven healthcare trend and worry that it will lead to problems collecting money from patients, unfair consumer ratings on their care and patients possibly forgoing care to save money.
Charles Welch, M.D., president of Massachusetts Medical Society, says that while he likes the idea of "patients being more educated and thoughtful," he worries practices may be under pressure to market themselves.
Actually, consumer-driven healthcare isn't new, and doctors who have had a taste of it seem to like it.
Ten years ago, business groups in Minneapolis and St. Paul, Minn., started the oldest and largest consumer-driven program, Patient Choice.
Under the arrangement, employers rate groups of physicians for their care, using patient-satisfaction measures. The groups are placed in three tiers, with higher reimbursements assigned to the higher tiers. Using employer funding supplemented by money of their own, employees buy coverage, paying more for the higher tiers.
Bob Burmaster, M.D., president of Fairview Physicians Associates, a Minneapolis practice with 850 physicians, says he welcomes the competition. Fairview has reached the highest tier of patient satisfaction, and Burmaster is comfortable with the process. "We know what is going to get measured and is going to be reported out," he says.
Shelley Giebel, M.D., a Temple, Texas, OB/GYN, stopped contracting with insurers in 1996 and now requires all patients to pay her directly.
"It works very, very well," Giebel says.
Reacting to a colleague's comment that she is "making pregnant ladies pay in cash," Giebel says: "Let's get healthcare in perspective. Yes, it's costly, but we can save for it." She thinks families can pay toward the $10,000 price tag of an obstetrics package in the same way they do for new cars.
She says her accounts receivable are low because she makes sure there are no surprises for patients. If a patient needs a lot of tests, a receptionist meets with her to itemize costs and prioritize what she should get, Giebel says.
Embracing defined contributions
While employers have talked about consumer-driven healthcare for years, there are many signs it is finally arriving.
Many companies are imposing higher co-payments for more expensive drugs and hospitals in an effort to make consumers more aware of these costs.
Others are offering high-deductible policies, under which workers must pay for the first $1,000 or so of healthcare.
Only a handful of employers nationwide have opted for a more sophisticated consumer approach, called defined contributions. In these arrangements, companies put money into a healthcare spending account for each employee.
Employees then use the accounts plus their own money to pay for healthcare until they reach a high deductible, when regular coverage kicks in.
Alexandria, Va.-based Lumenos, one of the largest defined contribution companies, has signed 15 companies so far, but company officials expect many more customers following a decision by the U.S. Treasury Department this past June.
In the decision, the department says it will grant tax-exempt status for defined contribution accounts as they are rolled over into the next year.
It is too early to tell the impact of this decision, but Lumenos officials say the company has been in discussions with 185 potential customers, many with concerns about the lack of a tax exemption.
With health plans reporting they will continue double-digit premium increases next year, employers' embrace of consumer-driven healthcare seems to be only a matter of time.
Defined contributions are "the way it's going to have to shift," Giebel says.
"There is no way that employers are going to continue absorbing premium increases."