HSAs and the Health Care Consumer

HSA

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

Have I got a deal for you!

I am a health care consumer. Or, so I thought.

For the first time, I have signed up for a Health Savings Account paired with a high-deductible health plan – or as we all like to say in health care, HSA paired with an HDHP.

So why did I do it?  It was cheaper for me. My HSA plan has lower pay-period costs and I kind of like paying myself into the HSA rather than into a plan’s premium. Sure, it’s all going to end up in the health care system anyway, one way or another. It just feels good.

Now the way this seems to work is that I go get care I need and then the provider charges me the plan rate. So if my primary care physician has a contract for a 15-minute office visit with my plan that pays 66 percent of charges, then that will be what I have to pay from my health savings account – 66 percent of what they charge commercial insurers. I will do this up until I meet my deductible, after which I will then pay coinsurance up until I hit my out-of-pocket annual maximum. Meanwhile, my plan provider is tracking all this so that they know when I have met my deductible, and so forth.

Thus far, I haven’t noticed any big differences. It just feels like I have a heck of a deductible, but with a cap on my overall liability and a forced savings account to help me pay for this care. I have yet to really feel like a consumer, more like a kid with allowance who knows that if the thing I want gets too expensive, Dad will step in and cover the difference.

I was hoping that this would all work differently – I want to be able to ask for and pay the cash price at my provider’s office. I want to pay them today – not make them send in a claim, of which I am going to pay most at first. I want to get that discount that comes from cutting out all the unnecessary process. I want to be able to track my expenses or spend from my HSA, and when I hit the deductible, report it to my plan. Why add the administrative overhead? Make me a consumer.

Here is what I also worry about with this program.

The Health Care Pricing Project recently released a new study examining the payment claims data from 88 million people under three carriers – Aetna, UnitedHealth and Humana. The findings demonstrated were that there are substantial differences in hospital-negotiated prices not only nationally but regionally. As reported in the State of Reform, in Seattle, prices for specific hospital services varied by a factor of four. Imagine if, in your city, a meal costs four times as much as a comparable meal across town – and you also had no way to tell the quality difference between them. You’d think that was crazy.

The report concludes that “private insurance spends are determined almost entirely by market power….prices in private insurance are determined unequivocally by leverage of hospitals in that area.”

That is what worries me. See, I forgot to ask my payer if they are the one that got the lower price or the higher price. It matters because I have to pay what they, the payer’s provider relations team, were able to negotiate – not what I can secure by offering cash. So what if my plan isn’t good at getting a deal, has no leverage?  It means that I am not really a consumer – I am blind to how good they are at getting the best prices. That information was not provided when plans were presented in open enrollment. It is essentially collective bargaining, but I did not get to see the deal terms, unlike most union members who vote on what they are offered.

Do you know how good your plan is at getting you a good price?

I’d love to hear from those of you who have a Health Savings Account. Do you love it? Is it making you a better consumer? Did you try it and then retreat back to PPO, if you still could?

1 Comment

  1. wreid2015
    Permalink

    Here is recent related article by Brooke Murphy over at Becker’s Hospital Review:

    HDHPs don’t make consumers more discerning: 5 things to know

    Written by Brooke Murphy | January 21, 2016
    Those enrolled in high deductible health plans are no more likely to shop around for care than individuals with other types of coverage, according to a study published in JAMA Internal Medicine.

    For the study, a HDHP was defined as having a deductible greater than $1,250 for individual coverage, or more than $2,500 for family coverage.

    Below are five findings from the study.

    1. Of HDHP enrollees, 60 percent believe there are large differences in prices and quality across healthcare providers.

    2. Only 17 percent of HDHP members think higher price physicians provide better quality care.

    3. Roughly 4 percent of HDHP members compared out-of-pocket differences among providers, compared to 3 percent of those enrolled in traditional plans.

    4. Of HDHP participants, 56 percent said they would use additional sources of healthcare pricing information if it were available.

    5. “Simply increasing a deductible, which gives enrollees skin in the game, appears insufficient to facilitate price shopping,” the report concluded. “If encouraging price shopping is viewed as an important policy goal, then there is a need for greater availability of price information and innovative approaches to enrollee engagement with this information.”

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