Amy Burns doubts that she would have gotten a breast biopsy last year if her family doctor hadn’t threatened to personally drive her there.
A previous physician had already told the 34-year-old New Hampshire artist not to worry about the painful lump, saying it was likely a cyst. But her new doctor first ordered an ultrasound and then, still worried, recommended a biopsy. Burns initially balked, panicked about the escalating medical bills given her health plan’s $3,000 deductible.
Her husband earned less than $40,000 annually and Burns was already getting treated for lupus, an autoimmune disease. Her husband’s plan, provided through a mental-health-services employer, did include a health reimbursement account. But the couple was initially told by the employer that only half of the account, $1,500, could be used for Burns’ care.
“I did not want to use any of it for a stupid lump that I was told previously was not a big deal just because it hurt,” she says. In May 2011, she relented and got the biopsy, which diagnosed a rare and early-stage form of breast cancer.
As high-deductible health insurance plans proliferate, they’ve been touted by proponents as a savvy behavioral tool to motivate enrollees to more closely scrutinize the price tag of imaging tests, brand-name drugs and more. And costs are lower. Families on high-deductible plans spend 18 percent less on outpatient care and 16 percent less on prescription drugs compared with those in traditional plans, shows a Health Affairs analysis published in May.
But at what point does the hefty out-of-pocket deductible—frequently dubbed “skin in the game” by consultants—discourage employees and their families from getting potential health problems checked out or treated that might prove costlier down the road? Several recent studies indicate that Amy Burns’ sticker-shock response is not unusual.
Researchers have found that at least some people enrolled in high-deductible plans reduce medical spending overall, including for preventive services—such as mammograms—that are typically still covered at 100 percent.
A Rand study published last year in the American Journal of Managed Care found that high-deductible participants spend 14 percent less on medical care during their first year on the plans, including fewer vaccinations and cancer screenings, compared with people covered by other insurance designs. “That indicates that people aren’t even getting to the stage of doing the price shopping [for health care],” says Amelia Haviland, a study co-author and associate professor of statistics and public policy at Carnegie Mellon University in Pittsburgh. “All they are thinking is, `I have a big deductible. I’m going to cut whatever I can.’ “
Another study, published in January in the Journal of General Internal Medicine, identified a similar cost-cutting trend among families with chronic conditions. Forty percent of lower-income adults on high-deductible plans reported delaying or skipping medical care compared with 15.1 percent on traditional plans, the study found. But higher-income families—defined as those earning at least $92,200 annually for a family of four—also made changes, with 16 percent on high-deductible plans reporting similar reductions compared with 4.8 percent on traditional plans.
The outstanding question, not answered by the January study, is how vital the missed care was in the first place, says Dr. Alison Galbraith, one of the study’s authors and assistant professor at the Harvard Pilgrim Health Care Institute in Boston.
For example, the patient might have wanted an MRI that wasn’t needed to assess back pain, she says. Or she says, “Somebody else might have put off getting a hemoglobin A1C [blood sugar] check when they had diabetes and should have come in.”
By 2011, 23 percent of privately insured adults were covered by some type of high-deductible insurance plan, some paired with a health savings account, or HSA, or health reimbursement account, or HRA, a survey conducted by the nonprofit Employee Benefit Research Institute in Washington shows.
The high-deductible design is becoming more common at the same time that corporate wellness efforts, particularly among large companies, are nearly universal, with a battery of onsite health clinics, risk-factor screenings and other efforts. By early 2012, 87 percent of employers with at least 1,000 workers had created a wellness program, shows the latest annual health benefits survey from the National Business Group on Health and consultant Towers Watson & Co.
Persuading Americans to take better care of their health remains a pervasive challenge, one that shouldn’t be blamed on high-deductible plans per se, says Jay Savan, a Towers Watson health consultant. “Let’s not vilify a particular [insurance] delivery vehicle,” he says.
But the price tag of getting a medical problem checked out—$100 and likely higher for a doctor’s visit—shouldn’t be discounted either, says Peter Ubel, a physician and behavioral scientist based at Duke University. “When you have to pay a lot upfront, you are going to wait a little bit longer,” he says. “The problem in health care is, you don’t know how long it’s safe to wait.”
Employers can strive to incorporate wellness goals into high-deductible plans by using financial incentives, such as contributing money to an attached account if the enrollee improves blood pressure or meets some other wellness goal, says Haviland, the Carnegie Mellon associate professor. But she also cautions that workers can receive mixed messages when employers promote wellness on one hand and on the other hand, offer an insurance plan in which “anything you try to do with your medical provider, you have to pay out of your own pocket.”
But wellness and cost-related goals both can be achieved, given that they are inter-related, says Melissa Campbell, benefits and human resources operations manager at American Century Investments, where 80 percent of the nearly 1,150 insured employees are covered by a high-deductible plan (most with an attached health reimbursement account).
The Kansas City, Missouri-based financial services company offers a battery of free health screenings onsite, including monthly blood pressure checks, mammograms and annual blood screenings. There are so many screenings, in fact, that American Century leaders sometimes worry that they enable employees to bypass their family doctor, Campbell says.
But, she adds, “Some of these people wouldn’t go to the doctor anyway. Hopefully if something looks out of range or abnormal, the individual would then take the steps to go to the doctor.”
Meanwhile, the deductible has influenced employees’ spending patterns, with more choosing generic medications and selecting urgent care centers over more costly emergency room care, Campbell says. “I think they’re being smart in how they spend it,” she says, regarding employees’ use of their health reimbursement account.
In 2011, the company’s rate of urgent-care usage was 147.6 per 1,000 members, compared with the 86.2 rate their insurance provider cites for the financial-services sector. The company’s average cost for an emergency room visit was $1,164 compared, with $168 for an urgent care visit, Campbell says.
“I’ve got to believe that everyone knows that to walk into the emergency room is going to be a $500 minimum charge,” she says. “That has to drive your decision.”
Moreover, employers can tailor high-deductible plans plans in various ways to best suit not only their workers’ income level but also their health risks, says Savan of Towers Watson.
High-deductible plans with an attached health reimbursement account—rather than a health savings account—offer more flexibility in design, he says. With HSA-linked plans, typically only a short list of annual physicals, cancer screenings and a few other preventive services can be fully covered outside of the deductible.
But health reimbursement account-linked plans also can exclude some basic medical services, such as doctor visits or preventive medications. That can help guard against dangerous sticker shock, particularly if the employer’s workforce tends to be lower-income and more vulnerable to chronic health problems. Otherwise, a $50 drug copay could balloon into a $600 full-cost drug once the employee’s new plan year kicks in, Savan says.
“The last thing we want that person saying is, ‘Well, gee, maybe I can make my one-month prescription stretch into two,” Savan says. “Maybe I will take my pills every other day instead of every day.’ You know what—that’s conscious human behavior and you have to deal with that.”
But that doesn’t necessarily mean that high-deductible plans present a greater financial hardship for employees, compared with traditional plans, if they face a sudden medical crisis, Savan says. He says a high-deductible plan can potentially offer a better deal, with lower monthly premiums and frequently a tighter lid on out-of-pocket costs for the patient.
That’s been the experience of Don Stranathan, a Northern California resident diagnosed in 2009 with Stage 4 lung cancer. Stranathan, who works at a small business-equipment dealer called Scott Technology Group, chose in 2010 to enroll in a high-deductible plan with an attached health savings account. “I wouldn’t go any other way,” he says.
Stranathan picks up the first $3,500 in medical bills annually, a limit he easily reaches, since the drug he takes daily to stall the cancer’s growth costs about $5,000 every month. But once he exceeds that $3,500 ceiling, he doesn’t pay any more. With a more traditional plan, Stranathan says, he likely would continue to be charged copays related to drugs, doctor visits, lab work and other, numerous medical costs associated with his cancer treatment.
For people on high-deductible plans, it’s the “middle-range stuff” of medical treatment that can pose the greatest challenge, treatment that falls between prescription drug purchases and a major surgery or hospitalization, says Jeffrey Ingalls, president of The Stratford Financial Group Inc. in Wayne, New Jersey. Sometimes an MRI or other costly imaging test is needed for a medical diagnosis, he says. “I think people do blow things off because of financial cost,” he says.
Ingalls, whose coverage is through a plan linked to a health savings account, says his family’s $5,000 deductible has influenced treatment. He switched from a brand-name allergy medication to an over-the-counter version, describing the new drug as slightly less effective, but one-sixth of the cost. The 40-year-old insurance broker also has postponed care, skipping recommended physical therapy to ease the moderate pain of a shoulder injury, which he blames on basketball and other weekend-warrior athletics.
Instead, Ingalls has self-prescribed rest, describing it as the more affordable route. To date, his price-sensitive strategies haven’t compromised his health. Could they some day? “Yes,” he says.
Haviland, the Carnegie Mellon researcher, can’t point to any research demonstrating that reduced care has resulted in worsening, and costlier, medical problems. But those potential repercussions would take time to develop, and be identified by researchers, she says.
If people aren’t managing their diabetes well, she says, “we’re not going to know until they show up in the emergency room.”
Studies, though, continue to illustrate how people can’t be relied upon to make the wisest health decisions when their own wallets are being tapped, says scientist Ubel.
He points to a June study published in the Annals of Internal Medicine that looked at medication spending after Medicare patients had reached the gap in their prescription drug coverage, often dubbed the “doughnut hole.” At that point, Medicare patients were more likely to skip drugs used to treat serious but symptomless conditions, such as cholesterol or blood pressure, rather than their antidepressants or pain relievers, researchers found.
It’s also risky to let employees learn from experience regarding health spending decisions, Ubel says. Just because ignoring a nagging cough worked last time doesn’t mean it’s the best strategy next time an employee starts hacking, he says.
A delayed diagnosis, say, for lung cancer, will cost the employer more for that individual, Ubel notes. But, he adds, “My guess is that the company will end up ahead financially.”
For every employee whose medical problem is caught late, “you probably have hundreds or more who would not have benefited at all from preventive care,” he says. “And you’ve saved money on them.”
Still, some employees might express their dissatisfaction with their feet. Once Burns’ husband learned that his employer planned to eliminate its plan’s health reimbursement account in 2012, he started sending out résumés.
In March, he began a new job in Vermont. He’s grateful for the better health coverage, yet misses the work he was doing previously, as well as his co-workers, his wife says. “There is no other reason we would have left,” she says.
Charlotte Huff is a writer based in Fort Worth, Texas. Comment below or email firstname.lastname@example.org.