New Year, New Plan, New Deductible

More reason to “shop” for health care

For many consumers, the New Year means more than just resolutions—it also means a “reset” of health coverage as the plans elected (or rolled over) during fall open enrollment take effect. And that reset means that most health care expenses once again apply to the deductible, with no cost-sharing by the plan.

Unfortunately, the New Year often brings increased drug prices. A recent blog post from AHIP noted an average price hike of 4% this January—on top of increases last summer. And, as the country begins to get the Covid-19 pandemic under control, providers will begin rescheduling elective procedures that had been postponed to free up beds for sick patients—and protect healthy ones.

These factors are combining to make consumers extra-sensitive to health care spending—and more receptive to information about how they can get the care they need at an affordable cost. With more than half of Americans receiving their health care benefits through their employer in 2019, there is an opportunity for employers to aid their employees in making these decisions. And the best part is, employers benefit from the reduction in costs, too.

Most consumers are not aware that medical products, services, and procedures do not come at a fixed price. Even within the same hospital or health system, treatment costs can vary by thousands depending on the provider – even if they’re both within the network. According to a 2019 report from the Health Care Cost Institute, health care costs can vary by up to 25-fold depending on location. While some regional differences in costs can be expected, these variances are not limited to those searching for care across state lines. In fact, another recent study shows that in California, the price of an appendectomy can range from around $1,500 to more than $185,000. 

With 68% of consumers reporting that they do not regularly compare treatment or service costs before choosing where to receive care, it is critical that in 2021, this mindset shifts and consumers understand the importance of shopping for care. Thankfully, they don’t have to go it alone. 

So how do employees learn to shop for their health care? The logical source of information is the same place they get their coverage from—you, the employer. Whether you create your own materials or partner with your broker, consultant or other advisors to develop and distribute content, employees need to be educated about:
Their ability to “shop” for health care services and what exactly that means, 
 

Needless to say, you should be sharing this regularly—not just at open enrollment or at the first of the year. Employees need this information each and every time they use their health care benefits, and this is certainly a message that bears repeating!

It’s no secret that the U.S. healthcare system is difficult to navigate, even for those with experience within the industry. There is a distinct lack of transparency in the health care industry. True transparency is defined as providing reliable and understandable information on a health care provider’s quality, efficiency and consumer experience in order to influence patient behavior and achieve better outcomes. 

While the U.S. government has made steps in the right direction with new price transparency rules in place requiring hospitals to provide a “menu” of procedure and service costs, research has shown that fewer than half of hospital services are actually shoppable, creating a barrier to true transparency. That – combined with the low health care literacy of most Americans – makes clear why shopping for health care has not been a priority for consumers. 

By offering healthcare advocacy services to their employees, employers provide access to experts that can help with the myriad questions most people have when working within the health system. With advocates available to do the heavy lifting, employees have easy access to information that allows them to make smart, informed choices about their care, which often leads to significant savings. In fact, in 2020, patients who shopped for care saved thousands of dollars on various procedures, for example:
 

Advocates can also help with more than just shopping for care. They can support employees by:
 

As 2021 unfolds, it is critical that consumers prioritize comparison shopping for healthcare. With a number of tools available through employers, providers and healthcare advocates, consumers looking to schedule care later on in 2021 have the ability to take control of their care and their finances by shopping around. While shopping for care seems like yet another thing to add to the to-do list, the financial benefit of the task cannot be ignored.