• JANUARY 2007 FEATURE ARTICLES •
From the Editor
CDHC on
the Precipice
By Robin Blair
Would you buy a used car from me if I said, “Your 2004 Camry
will cost you somewhere between $13,995 and $18,845. Sign here, on the dotted
line.”
If consumer-directed healthcare (CDHC) continues on its current path, it will
fail for two reasons. First, despite all the ballyhoo, single-source portals and
Washington-based press statements about transparency, scorecards and
empowerment, it is impossible to learn in advance exactly what a medical or
surgical procedure will cost.
Take your choice: carpal tunnel surgery or colonoscopy. Pick a practitioner,
pick an ambulatory surgery center (as if it’s up to you), pick a date (as if
it’s up to you), pick an anesthesiologist (ditto), talk to your health plan—and
then quote me a single, final and total out-of-pocket cost. Is it $285, $420,
$586, $703 or $910? It can’t be done in advance; only after you have been
knocked out, invaded, revived, sent home and deluged with paperwork. What
portion of that scenario does the phrase “consumer-directed” describe?
Secondly, most consumers aren’t smart enough or motivated enough to demand any
more of the healthcare sector. “Demand” is a curious word. Most articles about
CDHC use the word in reference to employers, as in, “Only 6 percent of employers
now offer consumer-directed health plans, but demand is expected to rise in
coming years.” No one writes about consumers with the word “demand” in the same
sentence, even when they
should demand.
Make no mistake—CDHC means cost-shifting, pure and simple. The person who
consumes the healthcare service gets to pay more for it than in the past. CDHC
advocates everywhere recite the mantra: When consumers have more financial
responsibility and more information with which to make decisions, they will make
smart decisions.
Really? Every day consumers buy $2,500 big-screen TVs, $18,000 cars and $320,000
houses they can’t afford. But they know: 1) exactly how much the goods cost; 2)
exactly what the monthly payment is; 3) exactly how many months they must pay
for. Here’s the flip side of that coin: Hewitt Associates’ 2006 survey of 18,000
employees indicated that 48 percent of employees enrolled in high-deductible
health plans (HDHP) wouldn’t make the HDHP choice a second time. That’s huge for
a fledgling product with a purportedly blockbuster future. Only 30 percent of
HDHP-enrolled employees felt they understood their plan benefits. What part of
those results does “consumer-directed” apply to?
Consumers demand to know prices on everything—kitchen renovations, Jeeps,
dentures, musical instruments and private school tuition—everything but
healthcare procedures. With no demands and no motivation, they follow medical
orders, appear at appointed hours and places, and take their chances on both the
delivery of the service and their share of the cost.
If we have the information systems—software, hardware and platforms—to
essentially interoperate the healthcare sector nationwide, and we do, then
certainly we have the IT to determine consumers’ out-of-pocket costs for medical
procedures, and post them on Web sites or customize them for patients. What we
seem to lack, on everyone’s part, is motivation. It’s easy to see why health
plans, hospitals and doctors are lukewarm: Tell the patient up front that his
out-of-pocket will be $845, and he might back out. But, patients? Someone ought
to rap them upside the head and, at minimum, compel them to ask every provider
every time what every procedure costs. Because, after all, what’s more
valuable—an intestine, wrist movement or a big-screen TV?