Consumers In For a Wild Ride and They Might Be Driving

Change in all its forms is one of the most important causes of individual stress. Health care providers are under pressure from all sides to change the way care is financed and delivered. The effect of these changes on individuals as consumers and patients is not yet clear, but what is clear is there are going to be significant changes in how individuals access and receive care. While the Affordable Care Act (ACA) will certainly affect an individual’s care most people will see these changes even if ACA were to disappear.

Changing consumer behavior is and has been the goal of almost everybody in health care. Individual behavior affects the incidence of disease while their behavior as consumers and patients affects the efficacy and efficiency of care. Changing provider payment mechanisms from fee-for-service to any of the many pay-for-performance reimbursement schemes is often justified as a means to give provider incentives to provide cost-effective care, but often the provider can only meet their incentives by changing patient behavior. For example, Medicare’s reduction in payments to hospitals with high readmission rates gives hospitals incentives to change patient behavior after they have technically finished being the hospital’s patient.

One method for changing behavior is offering less insurance coverage through higher deductibles and co-pays tied to health savings accounts. These arrangements are intended to give consumers more “skin” in the game. One result of these high deductible plans was that people using effective preventive care less because they bore the entire costs of that care. Most high deductible plans now offer some number of preventive or primary care office visits before the deductible kicks in.

A number of studies have found that decreasing copays for drugs or other costs for patients recovering from specific conditions (such as a heart attack) increases the patients adherence to recommended treatment and decreases bad outcomes that may lower provider payments under a pay-for-performance reimbursement mechanism. Providers negotiating with payers to implement such an arrangement may demand insurance plan design changes to help them meet performance metrics. For a consumer that means an increasing complicated insurance plan.

Changes in reimbursement almost always means passing more risk to providers or health care services. The rational provider response is to join or create larger more integrated entities that are better able to bear risk. Those larger more integrated entities may also be more efficient and effective providers of care. This increased efficacy may be a result of coordination of all of the providers who touch a patient during an episode of care, or over a given time period.

For the consumer however, there are clear trade-offs. While they may be getting higher quality lower cost care, their ability to choose providers, sites of care, or even styles of care is likely to be increasingly limited. One of the factors that created a backlash against HMOs in the 1990s was precisely this constraint on consumer choice. One of the biggest headaches for human resource managers for large employers is the resistance of employees to health insurance arrangements that limit employee choice of providers.

In the near future consumers are likely to see increasing limits on their choices of providers; patients are likely to see more limits on their choices of treatments; individuals are likely to see more incentives (positive or negative) to change their behavior. Their responses to those limits and incentives will determine in large part the organization and structure of the health care delivery system.

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August 25th, 2012
12:41 am

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