Enrollment in high-deductible health insurance plans has exploded over the past five years. I’m learning the hard way how these plans do — and do not — work.
About one-third of American workers covered by health insurance are now in high-deductible health plans, in which the policy holder pays a substantial portion of the cost of health care services out of pocket before insurance coverage kicks in. Many economists and health policy experts believe that these plans are a promising way to reduce health care spending.
So when a high-deductible plan became available through my employer, Harvard University, a couple years ago, I decided to enroll my family in it. If this is going to be a big national experiment, I thought that I, as a physician and a health policy scholar, ought to know what it’s like to live with this kind of health insurance. Debra, my wife, was not convinced.
While I am a proponent of experiments and evidence, Deb wasn’t interested in including our kids in this one. The notion of having to think about shopping for health care if any of us got sick wasn’t attractive to her. But if we stay healthy all year, I argued, we would actually come out financially ahead.
She reminded me that we have plenty of other reasons to stay healthy all year, and the potential financial savings didn’t feel like a particularly compelling additional reason. Defeated by her logic, I turned to pleading.
I made the point that we had a lot of advantages in navigating the health care system effectively and that she and I should go about making the same health care decisions that we would have otherwise. She relented.
My family is now in its second year under a high-deductible plan. That means we are responsible for paying the first $6,000 of our health expenses for the year, for everything from a doctor visit for a flu shot to surgery.
It has been an educational enterprise.
Our experiment is showing me again and again that it’s extremely hard to be a health care consumer in Massachusetts — just as I’m sure it is in other states. Want to know how much a particular type of health care costs, like a visit to a specialist or getting a minor surgery? Good luck figuring it out. My insurance company’s online tool was hard to use and, even as a physician, I could almost never guess what sets of services a visit to the doctor might generate. What’s more, there was no useful information about the quality of care. Price information without quality information is not particularly helpful when shopping for medical care.
The second lesson was that being a health care consumer is stressful, at least the way the system is currently set up. Here’s an example. Our son had surgery last year. We got a call saying it was time for his one-year follow-up. Deb stressed for nearly two months over whether or not to make the appointment. Of course she wants our son to get the care he needs, but did he truly need this follow-up? That’s both the promise and the peril of high-deductible plans — they are supposed to make you think twice about consuming health care.
She eventually went with our son for his one-year follow-up — they spent two minutes with the surgeon — and paid $465 for the visit. I’m not sure my son, or my spouse, felt any better afterward. There were many examples like this sprinkled throughout the year, but the most profound one was the one I experienced for myself.
I have supraventricular tachycardia, a common heart rhythm problem. When it hits, my heart races at about 180 beats per minute. It comes on a couple of times a year, lasts a few minutes, and usually isn’t a big deal. But one morning I woke up with my heart racing. After 30 minutes, I wondered if I should go to the emergency department, knowing that I’d probably get stuck with a multi-thousand-dollar bill. So I kept waiting. After an hour, during which my heart kept beating furiously, my chest started to hurt. I knew what that meant — I was at risk of having a heart attack.
Deb asked me what I would tell a patient in this situation. That was easy: I’d tell him or her to call 911. But I kept waiting. Finally, about 15 minutes later, the abnormal rhythm finally broke and I felt my heart calm down. I was lucky — I had rolled the dice and things had worked out.
That brings me to the third lesson of high-deductible health plans, the lesson of what didn’t happen — I didn’t really have a choice of where to go for treatment.
Imagine that for dinner on any given night, your two choices were eating at a very expensive gourmet restaurant or not eating at all. I bet that more of us would forgo dinner a lot. (Thank goodness we have a range of options.)
The US health system is something like that. During my heart rhythm problem, I realistically had only one choice — going to the emergency department. Knowing that they are usually the only option, hospital administrators make emergency departments super expensive.
One promise of high-deductible plans is that if we have a real market for health care, we will see lots of innovation, including different types and levels of urgent care centers. But that hasn’t happened.
During my heart episode, all I really needed was a place that had a heart monitor and that stocked common, inexpensive rhythm-restoring heart medicines. The real cost should have been $200 to $300. If I had known that such a place existed, I would have gone there. But this mid-price range of options is rarely available in health care. So I skipped it. And that’s what people are doing under high-deductible plans — skipping needed care.
Here’s my major takeaway so far from this ongoing experiment: Simply asking people to pay out of pocket for their health care doesn’t create a health care marketplace. If we are going to be serious about creating one, we have to generate much more innovation in care delivery models, including much more leeway on the scope of practice regulations, such as letting nurses do a lot of the things that only doctors can do today.
We must be much more aggressive about price transparency and make quality data ubiquitous. The way we’re doing it now, even I as a doctor and a health policy expert can’t figure out when I or my family’s needs are worth the expense.
If we continue with high-deductible health plans the way they exist today, more and more people will experience what my family did — the stress of having to make medical decisions with little information and few choices. At best, we’ll have a health care system that might save a little money — but at the risk of harming the health of our citizens.
Ashish Jha, MD, is an internist at the VA Boston Healthcare System, a professor of health policy at the Harvard T.H. Chan School of Public Health, and director of the Harvard Global Health Institute.
Thank you for that very thought provoking article on health insurance. I net have been able to understand the different types of plans and I have tried most of them.
I now am very fortunate to be on medicarequest being 75 years. I feel much better on medicare knowing it covers 80% of the hospital and doctors.
Being retired, I live on a fixed income and pay the twenty percent . This is fine unless I have to have tests, outpatient and hospitals stays . These I have to pay on payment plans.
My biggest fear is if our gov’t decides to change medicare.
However I do still have to decide on a Healthcare plan or company every year which then entails picking a new prescripton plan and health plan with which doctors I can see, which hospitals and outpatients are allowed as well as which pharmony I can go to).
There is no good help on line besides most people don’t really understand how complicated and important these life care decisions are.
I’m having severe chest pains right now, teeth are sore, drove home from the grocery store with my windows and sunroof wide open (-5 degrees out), started crying in my car for some unknown reason, both arms are sore and weak. Have two stents all ready from a previous heart attack. But I’ll be dammed or dead before I go to the ER on Dec. 30th and pay the 6000.00 deductible just to get tagged again on Jan. 1st.
I waited for an hour and a half with heart attack or pulmonary embolism symptoms, hoping it was just gas pain. Why, I have medicaire and do not want to be bankrupted. Well, I was having a heart attack and the crew putting two stents in my LAD asked me why I waited so long. Then other hospital people would say, “Don’t worry about the cost.” and so on. Anyone who has viewed Michael Moore’s documentary Sicko, knows how evil and corrupt US health care is and how just and wonderful it is in other countries Moore explored in his documentary. The US can spend 1,000 billion on defense, killing, maiming, uprooting, innocent people all over the world as mindless mercenaries for evil, crazed zionists, and shareholders in the military/security complex, etc., but refuses to help its own citizens with a decent and fair health care system. The US is a sick joke and is getting worse. Other so called advanced countries peoples do not have to consider becoming bankrupt if they are having a heart attack while their government spends more on defense then the next 8 largest defense spending countries in the world. And other advanced countries do not see the top percenters having more percentage of their countries wealth every year concentrated in their hands while “their” government cuts every social welfare program and aided and abetted the loss of millions of living wage jobs in their country because lobbyist money talks. Living in the US is like being those three poor guys in the RU-RU joke.
You could have gone to an ER Veterinary clinic with your dog and for about $300 gotten that care. We in the Veterinary medical world have had to deal with costs and care for a very long time.
We embarked on this path about 3 years ago and I’d say from a dollar standpoint it has been successful however, as you mention there’s a learning curve. ER visits will break you as there’s no “shopping” for services. I have found that of the 3 nearby hospitals their billing practices fluctuate wildly; in one instance a CT scan was $2500 more at my local hospital. Hard to shop when you’re walking into the ER with abdominal pain on a Friday night at 10:30pm. I’ve also learned through this that most of primary care followup visits are unnecessary. Why pay the $240 per visit when we’ve already consulted on an item recently and can get an additional script without revisiting the office.
The key to managing the high deductible plan though is an HSA. Take the money you would have saved from picking a “regular” plan and allocate that money to the HSA. Over time, if this experiment works you will have an HSA that continues to grow and can absorb that $4,000-$6,000 hit that inevitably you will take. In year one it will be difficult especially if you don’t modify your usage and you have ‘an event’. Year two shows promise, year three for us just took a $3,000 hospital bill like a champ and we’re still saving money.
I think Dr. Jha could have called his cardiologist colleague at Harvard, explained the situation of his acute SVT, asked his wife to pick up a prescription, then stop by a local pharmacy. It would be lot chapee option then going to the ER.
It should be an one-time only process during his “experiment”! But I simply cannot comprehend why he suffered and waited for 75 minutes before his heart rate reverted to normal. It was a huge risk IMO!