Sunday, November 12, 2006

A Health Insurance Experiment

The sample may be small - my family - but we have learned a few things from our little experiment with a high-deductible health plan.

Our experiment began with an experience that is all too common now a days - the premium of our employee sponsored health insurance was going up and we were going to bear the brunt of that increase. So we were faced with the choice of paying high monthly deductibles, something we couldn't afford, or purchase a high deductible health plan on our own and take the risk for most of our utilization.

The first thing that we learned was that you can find plans with "affordable" premiums. The catch, of course, is what you have to pay our of pocket for the standards - office visits, prescriptions, labs, etc. That is where our experience started to break down. Our particular insurance carrier had the inexplicable practice of charging us a pretty hefty "co-payment" for office visits, thus giving us the illusion of paying for our visit, and then surprising us with a bill in the mail for the true, total cost of the visit.

Even so, we did do our best to manage costs. When my wife was experiencing some nagging but non-descript symptoms, we did go see the doctor, but we decided to hold off on an MRI. We ended up having an interesting conversation with the physician about the cost/benefit of the MRI and other diagnostic options. Our physician admitted that he didn't know the cost of the MRI and hadn't had this type of conversation with his patients before. How interesting!

But even though we tried to manage our costs, the system just wasn't there to support us. The straw that broke the camel's back was a bill we received for lab work for $345. To say the least, we were not expecting such a high bill, months after the date of service. When I called the customer support desk, I told them that we were not informed of the total cost of the test at the time of service. I was told that their process was for the patient to get an itemized list of services and call the customer service line for an estimate. I responded with a frivolous attempt to explain why this is not an efficient way for the patient to understand and manage costs. The customer service rep actually told me that they don't give providers access to cost information, so that clinical decision making would not be influenced by price. Argh!

Now to be a little fair, this unnamed, large, closed-panel HMO doesn't want to give the impression that it is making care decisions based on the financial impact to the organization. Bravo, that was the perception that it needed to fight after over-aggressive gatekeeping in the '90s. But this is a new era in healthcare. Gatekeeping was the insurance companies' attempt to manage cost, because they were the one's footing the bill. Now more of the burden is on the patient and it is the patient that needs all of the relevant information, including cost, to make a good decision for himself.

So, how did it go for us? Given our circumstances, the high-deductible plan gave us the most affordable monthly premiums and we expected to pay more for services out of pocket. If we had stayed with the plan for more than a few months, then I think the costs would have evened out. Our behavior did change. We started paying keen attention to when we used medical services and, interestingly enough, we started using complementary medicine with our newfound freedom from the HMO. It didn't count towards the deductible, but all of a sudden we started looking for health solutions that produced results. Apparently, alternative medicine providers will actually take the time to listen to you, work their mojo, and for a fraction of the cost.

But with the new job, came new health insurance, and so ended out little health insurance experiment. Man, it is nice to be heavily subsidized again!


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