Consumer-driven healthcare, expanding by leaps and bounds, may change the way practices handle collections, advise patients on necessary care and handle malpractice risks, experts say. Membership in consumer-driven health plans, in which employees spend a set sum of money that their company deposits into a "defined contributions" account, more than quadrupled during 2003 to half a million, according to Synertech Health System Solutions, a Harrisburg, Pa.-based outsourcer to the consumer-directed healthcare market.
Though that figure still represents a tiny segment of Americans, experts in the field predict enrollment is about to greatly increase because employers are entering another year of double-digit premium hikes in 2004.
Executives at several physician practices say they welcome the trend as a way to keep spiraling healthcare inflation in check, even though none of them report having any experience with defined contribution patients.
"We have evolved into a society of 'I want, I want, but I don't want to pay' consumers," says Richard Slavin, M.D., CEO of Camino Medical Group, a 175-physician group in Sunnyvale, Calif.
Paul Wertsch, M.D., a family physician and president of the State Medical Society of Wisconsin, adds: "What we need to do is make consumers more effective shoppers." For example, he says, the State of Wisconsin Web site shows a 300% variation in surgeons' charges for laparoscopic cholecystectomies in the Madison-Milwaukee area.
Lee Sachs, M.D., president of Advocate Health Partners, which contracts for 180 physicians in Advocate Medical Group in Park Ridge, Ill., thinks consumer-driven plans will accelerate a trend toward more consumer-friendly practices.
But Sachs adds that he is concerned the new payment arrangement will make it harder to collect fees from patients paying for their own care.
"It's been a lot harder to collect the co-payment from the patient than the payment from the insurer," Sachs says. "It's the last thing that gets paid in a family's budget cycle."
At Definity Health Corp., a large consumer-driven plan based in St. Louis Park, Minn., practices bill the company and do not have to bill patients as long as their defined contribution account has not been exhausted, says spokesperson Chris Delaney.
Delaney says the typical payment to a Definity account is $1,000 a year, and the unused portion is rolled over into the next year, thus increasing the amount available.
In addition, he says the Definity patient does not have to pay for preventive care and the plan covers catastrophic care.
But Delaney reports that 40% of Definity members exhaust their accounts, in which case the physician must collect directly from the patient. Physicians cannot ask Definity in advance of care if the account is exhausted, he adds.
Many physicians are concerned that defined contributions patients skimp on care, but Delaney says a recent study found that diabetics enrolled in Definity did not forgo services. He concedes, however, that more studies need to be completed.
Meanwhile, some experts say physicians could be subject to malpractice lawsuits if they allow patients to skimp on necessary services.
In a study of consumer-directed health plans (CDHP) released in May by Hartford, Conn.-based Conning Research & Consulting, Conning researcher Robert Booz warned that "decisions about care for the CDHP patient may increasingly involve personal finances rather than quality of care or prevention."
Booz notes that physicians who recommend patients forgo care may face malpractice risks. "The idea of an employee choosing his or her own medical care will not relieve providers from the potential bad effects of inappropriate healthcare decisions."
Also, the prospect of patients running out of money in their accounts means that "physicians are probably going to come up against more situations of people who just can't pay," says Robert Seifert, policy director of Access Project at Heller Graduate School at Brandeis University in Waltham, Mass.
More aggressive payment collection efforts at hospitals, he says, have prompted some state lawmakers to propose restricting hospital collection activities.
For example, a new Connecticut law, effective in October, lowers from 10% to 5% the maximum interest rate hospitals can charge on bills.
The law also forbids hospitals from garnishing wages, seizing bank accounts or putting liens on homes without an additional court order.
What patients getConsumer-driven health plans typically have:
- An employer-funded health spending account
- A deductible that employees are responsible for paying
- Health insurance to cover major expenditures
- More choice in covered benefits than traditional health insurance
- Healthcare information and administrative services via the Internet