Engaging the hesitant health care consumer
We may be a society of expert shoppers, but the health care industry is another ballgame entirely
Rising health care costs have forced employers to shift expenses to their workers in record numbers. Enrollment in high-deductible plans is up, and out-of-pocket health care costs are impacting more American household budgets every year. According to The 2013 Aflac WorkForces Report, this cost-shifting trend will continue. There’s a growing financial need to start price shopping health care services.
The Aflac study also warned that consequences of the economic downturn (cost-shifting, pay freezes, layoffs, reduction in hours, etc.) have created a mentally stressed-out and financially vulnerable American workforce that is largely unprepared to take the reins. Changing benefits plans without arming employees with the information and tools they need to manage their health care decisions can result in a disastrous hit on employee productivity, engagement, and job satisfaction metrics.
We may be a society of expert shoppers, but we’re accustomed to buying goods and services in an open, Amazon.com-driven market model that promotes competition and keeps pricing relatively level. The health care industry is another ballgame entirely. Played in another country. On another planet.
In March 2013, Steven Brill’s Time magazine cover story, “Bitter Pill – Why Medical Bills Are Killing Us,” revealed wild, inexplicable variances in costs for identical services at hospitals across the nation. Two months later, the Centers for Medicare & Medicaid Services released data sets that compared charges for the most common 100 inpatient and 30 outpatient services.
As with commercial insurance, huge cost variations were noted, not just in different parts of the country, but within the same towns — sometimes even within the same provider practices.
Americans began realizing that the system was gamed and are seeking a game-changer.
The process for comparing costs for even common health care services has historically been excruciating, if not impossible, for patients. And employers often have no line of sight into the shadowy cost negotiations that impact their premiums due to gag clauses that prohibit health insurers from publishing prices.
This price transparency problem has resulted in the emergence of a new service in the health care space – innovative shopping tools and engagement strategies for employers, doctors, and health plans looking to reduce benefits costs by finding the highest value options. Additionally, some states have made significant strides in making price information available to the public. And many health plans offer general ranges of cost information on their member portals.
So people are shopping, right? Wrong. Engagement doesn’t begin with price transparency. Education and financial incentive are imperative first steps to helping people change ingrained health care buying beliefs and behaviors.
Americans are also struggling with years of health care habits and entitlements. Some 54 percent of workers responding to the Aflac study said, “I would prefer not to be more in control over my health insurance expenses and options because I will not have the time or knowledge to effectively manage it.”
We need retraining – and change hurts.
Cutting through the fear and frustration requires communication practices that are creative and personal. Employers need dynamic content that promotes ongoing workforce awareness and education.
Some employees don’t yet have high-deductible plans. Others anticipate that a significant health issue will quickly eat up their deductible for the year. In either case, there is no incentive to shop. To tackle this challenge, my company created a rewards program that offers members a portion of the savings they generate when they choose high-quality but lower-cost services at an alternate location.
To further engage members, programs must reach individuals as close to the point-of-service as possible — the moment people are focused on their health issue and ready to purchase.
Radiology, for example, sports some of the widest price gaps for identical scans. In 2013, my company began contacting members after they’d made a high-cost appointment to help them find a more affordable facility in their area. Members who make the switch are given a financial reward. Eighty percent choose the lower-cost radiology provider.
When people are armed with knowledge, targeted financial incentive, and personal guidance, utilization of emerging price transparency tools jumps dramatically. These empowered consumers are not only prepared to manage their financial health care decisions, but also support a new health care model that promotes market-based reforms and drives more cost-effective delivery and improved outcomes.
Rob Graybill is CEO of Bedford Compass Healthcare Advisers, a company that provides price-transparency services.