One of the greatest public-relations coups in the history of the healthcare industry is the creation of the term "consumer-driven healthcare." Anyone who follows healthcare knows that consumers had nothing to do with this latest cost-saving invention from the minds of employers and health insurers. And the only "movement" attached to the term is the transfer of money from the pockets of patients into those of employers and insurers and, potentially, healthcare providers.
Over the past three weeks, a number of organizations have released surveys or reports on two key components of consumer-driven healthcare: high-deductible health insurance policies coupled with health savings accounts. And, depending on who released the survey or report, consumers either love them or hate them. See if you can match the headlines from the news releases announcing the results with the organization issuing the release (See diagram).
It's pretty clear what's going on. Patients prefer their traditional employer-based health insurance, which includes indemnity coverage, PPOs and HMOs. Insurers prefer high-deductible plans tied to HSAs because their risk doesn't kick in until someone is really, really sick or injured. Employers prefer high-deductible plans tied to HSAs because they will lower the cost of providing health benefits.
Proponents of "consumer-driven healthcare" say high-deductible plans and HSAs will encourage consumers to adopt healthier and safer lifestyles, and to comparison shop if they need healthcare services. But a little-noticed study released late last month by the Government Accountability Office shows why the comparison-shopping aspect of "consumer-driven healthcare" is a myth, at least for now. As Modern Healthcare reporter Melanie Evans disclosed in last week's issue, the GAO found no rhyme or reason to the prices charged by hospitals and physicians or the prices paid by health insurers for hospital or physician services (Oct. 3, p. 18).
What does this all that mean for healthcare providers? From a financial perspective, it holds the promise of more revenue, higher profits and improved cash flow. Patients with high-deductible health coverage will have to use cash or credit for their care, at least initially. And patients with high-deductible health coverage may be paying full charges, not the discounted rates often charged to PPOs and HMOs. But it also holds the promise of higher bad debt if those same patients are unable to pay their bills.
If you're an insurer or employer, consumer-driven healthcare is safe bet. If you're a patient or provider, it's a gamble.