Economic Consent: The Role of Financial Decisions in the Care Process

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By Bill Reid, SVP of Product Management and Partners, SCI Solutions

“$630?!”

This is how the conversation with my wife began, as we opened that day’s mail. In that envelope was a bill from a lab. It represented the balance of what remained after a former insurer had applied its discounts and made its payment.

“Did we know we were going to have to pay this amount of money when the tests were ordered?”

I knew the answer before I asked the question. Study after recent study shows that few patients know the likely financial consequences of the health care decisions they make. This lack of understanding results in economic distress, surprise, bad debt and impaired credit ratings.

The Kaiser Family Foundation’s April Health Tracking Poll found that only 6 percent of those polled saw comparative price information for hospitals or doctors in the past 12 months, and only half as many said they used it in making a decision. So while half didn’t use it – half did!

When the U.S. Federal Reserve compiled its Report on the Economic Well-Being of U.S. Household in 2013, published in July 2014, the findings showed that only 48 percent of Americans would be able to completely cover a hypothetical emergency expense costing $400 without selling something or borrowing money.

The Consumer Financial Protection Bureau issued a report in December 2014 entitled Consumer credit reports: A study of medical and non-medical collections.  In it they commented: “In particular, the complexity of medical billing and the third-party reimbursement processes faced by most patients and their families is a potential source of confusion or misunderstanding between patient, medical provider, and insurer. That complexity could lead some consumers to be unaware of when, to whom, or for what amount they owe a medical bill or even whether payment was the responsibility of the consumer rather than an insurance company.”

My wife and I were one of the unaware – how could we not know that we’d be getting this bill for this amount at this time? Boy, did we feel stupid – but should we have?

In health care, we have a long-established tradition of patient-informed consent – so much that we have made it a verb that many of us know through statements like, “Did you consent the patient yet?” This is a reflection of the value we have placed on the concept of patient autonomy – that patients have the right to know what is going to be done to them in advance – all the risks and benefits, outcomes and potential consequences. We believe that providers have duty to inform their patients and that nothing should be done prior to obtaining that consent (except in emergency cases where it is not practical to obtain consent without putting the patient at unacceptable risk). It is the fundamental way we honor the patient – and rebalance away from a formerly purely paternalistic approach of “the doctor always knows best.”

Why are we not applying that same concept to what I call “economic consent?” Why not present the economic consequences to patients in advance – the expected financial outcomes, the potential complications. Let patients know these facts as they are material to the overall decision-making process. Patients may make a different decision as a result – either asking for an alternative clinical approach, postponing care, working out payment approach proactively rather than in a panic, retrospectively.

Clinically, there is no 100 percent certainty – we talk in terms of likelihoods and levels of risk. We lay it out there and offer a clinical opinion for the patient so they can make the right decision. We partner with the patient to get the right outcome amid uncertainty. However, financially, it does not feel like such a partnership – it feels confusing, almost purposely so. It is what you go to talk with the patient accounting people about or what you have to call your insurance help line to get resolved apart from the clinical setting. It feels like some dirty part of the care process.

If, though, we thought about the economic considerations as part of the overall wellbeing of the patient, it would all come together – the clinical decision, the financial decisions and even the social decisions. It is time for money to be explicitly part of the consent process – there is nothing dirty or shameful about it. Care costs money. It is unacceptable to surprise patients, injuring their bank accounts and credit reports, while we fix their bodies.

As for my bill – we paid it. But I am asking the doctor why they didn’t tell us that this testing would have cost so much under our plan. I am applying a new level of accountability to that relationship. Not only am I getting smarter about what is covered by my insurance, but my providers will, too, if they want my business.

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