Two weeks ago I wrote about some of the unintended, but positive, consequences that could result from employers dropping employer-sponsored health insurance (ESI). Following that post, many weighed in about various other consequences of such behavior from employers and what that means for health care coverage for millions of families in the US. One issue in particular caught my attention; not only because of the touching stories associated with the discussion, but because of the unique and inspiring methods some providers are utilizing to compensate for the lack of insurance coverage.
As Jodi Carroll of VoteFacts.org underscored, millions of women and men in the United States are reliant on their significant others employer to provide their family’s health insurance. Women, in particular, are disproportionately reliant on husband’s employers for coverage, with children who are also dependents.
Although there are positives that might ultimately develop in the individual market due to ESI, the current and near future are exceptionally frightening for many families and employers have started down that slippery slope by excluding many dependents from future insurance coverage.
Given the recent discussion in the media, spouses and children being dropped from employer coverage is a growing concern. In the context of a bloated and dysfunctional health care system, this significant and immediate alteration in health insurance coverage could be very difficult for many households to absorb financially, particularly if their income falls just above the threshold for federal subsidies to purchase policies in the upcoming health insurance exchanges.
But, what if these spouses and children had an option that could provide them with most of the services they need, and was easily accessible and affordable.
Throughout the nation, in response to shifts in health care, many small direct health care providers are opening shop. These direct providers are able to combat many concerns through price transparency, easy access and lower costs as they establish what is basically a menu of cash only services. Further, these one-on-one scenarios improve decision-making between patient and physician and take out the need for insurance and proof of citizenship.
While many services are not available through these direct providers, a bulk of what the majority of people need are. Chronic disease management, acute care services and preventative care are all available at a face value, affordable price.
Residents in North Carolina have embraced a shining example of this new system. Access HealthCare is a direct care provider in NC with results to be impressed by. One of their diabetic female patients, and her teenage son, had lost their health insurance when her husband them, taking his ESI with him. According to her KevinMD website interview, she was working two retail jobs to fund her diabetes treatment and medical, at a cost of $5,000 a year.
However, once she found Access Healthcare, her annual costs were reduced to $450 annually and her health care results improved.
Similarly, according to Dr. Brian Forrest, founder of Access Healthcare, “a patient who normally has an 80/20 plan (like Medicare Part B) might end up having to pay 20% of their fee to see a specialist for a stress echo. If the cardiologist I use gives them an 85% discount to just pay cash up front, then the patient actually spends less out of pocket by not using their insurance.”
Although not all medical care can be preventative or primary, Dr. Forrest contends that “only about 1% of the population gets hospitalized annually. Only about 5-10% of patients that seek care at a physician office cannot get the services they need in the outpatient setting.”
For now, most of what people need can be found in offices like those mentioned above. However, I would still encourage citizens to purchase, at minimum, catastrophic coverage for hospitalization.
Additionally, as we begin to see the intended and unintended consequences of the Affordable Care Act, it is vitally import that we are open to new ideas and creative methods for meeting the nations changing health care needs.
Brad Wright, PhD
Shirie Leng, MD
Nicole F. Roberts
Wright on Health 
Matt Richmond (@brainofmatter)
March 11, 2013 at 2:30 pm
This is how the health care system *should* work. Cheaper services should be paid out of pocket, incentivizing proper investigation of costs (assuming greater transparency accompanying the mindset shift), with insurance being used only for catastrophic circumstances. I never really understood the idea of using insurance to pay for a $5 prescription, since it only increases the amount of paperwork, administration, etc. that needs to be done. Insurance is supposed to be for the purposes of smoothing out risk over a larger population. Everyone needs $5 prescriptions at some point or another. It shouldn’t even be a thing. Doesn’t make any sense.
This is, of course, not in reference to the medicaid population who may need cheaper medical expenses paid for.
Ramona
March 12, 2013 at 4:16 pm
I never thought I would say this but it might be a good idea to have employer plans go away. At the very least, people who have refused to confront the issue, or not had to confront the issue, would begin to realize the invisible costs. When people start to add up the premiums and lost earnings, it will be a no brainer to shop for their own policy. The states that have already started work on the health exchanges will be ahead of the curve. In Michigan you can now purchase a plan from BCBS that winds up being less than employer sponsored coverage, same network, and same coverage, It remains to be seen whether employers “give back” this money in the form of higher wages, though. Some employers may have made money from their self insured plans as well. In a way this is coming full circle as insurance companies get back in the business of providing insurance (as opposed to employers).
Shirie Leng, MD
March 13, 2013 at 5:53 pm
Wow. I hadn’t heard about these direct providers. Sounds good in a number of ways. My only concern is with documentation and continuity. If you are getting a whole bunch of people to pay out-of-pocket for services, that’s all great until they need something in an emergent or catastrophic way, and then the hospital and doctors they go to have to records of any of the care they got previously. I am also concerned that in this model a patient might be seen by a different provider each time, which isn’t ideal for quality care. But the idea of an actual price list for services? Fantastic.
Thomas Cox
March 18, 2013 at 10:55 am
“While many services are not available through these direct providers, a bulk of what the majority of people need are. Chronic disease management, acute care services and preventative care are all available at a face value, affordable price.”
And here is the crux of the problem. These services are cheap and easy to come by, for most of the population, because they do not address the real costs of health care – chronic and acute health care for life threatening conditions.
Show up at one of these direct providers with an arterial bleed, advanced gall bladder disease, lung cancer, or with a heart attack and they will inform you that you need to go to an emergency room immediately.
Want to have your temperature taken, your blood pressure done, a toe nail clipped. Great. But you really don’t need the staff at a direct provider to do that anyway. Yes, they can prescribe antibiotics for an infected finger and it will be faster and cheaper than the same service at an emergency room.
But then again, that is all you will get at a direct provider. What you won’t get is someone who recognizes that your infected foot isn’t your real problem and send you off for an MRI or admits you for emergency surgery.
In a real health problem the flaw in the direct provider model is that the patient will get stuck paying for the direct provider’s service and then they will be directed to a specialist, emergency room, or hospital where they will incur the usual costs as well as the costs of the direct provider.
Yes, Walmart could open up a direct provider office in every store. Yes, they could offer routine care services at a far lower price.
But there is a downside. Several years ago I bought half a dozen storage bins at walmart. As I was taking them, in the cart, to my car they slid off the cart. Three of them hit the pavement and cracked, rendering them useless.
Walmart sells cheap products. If they had been a higher quality plastic they would not have broken after falling 3 feet.
If your health is so unimportant that you won’t mind being misdiagnosed, not diagnosed at all, or treated for only one thing when a little more curiosity on the provider’s part would disclose many health concerns, then a doc in the box is the place for you.
But if you realize that you did not go to medical school, have no idea at all whether your headache or knee pain is the most important health issue you face, then you probably want to see a provider who doesn’t specialize in the health care needs of the very healthy.
steps2sorg
March 21, 2013 at 8:20 pm
The uninsured usually fall under the radar when it comes to getting proper care, especially because they usually fall between a thin line before really qualifying for gov’t assistance and being able to purchase health insurance. Our organization, Steps To Success helps uninsured diabetics with their testing supplies like meters, strips and lancets, as well as access to a diabetes educator and dietitian when needed.
Thomas Cox
March 22, 2013 at 9:33 pm
The real problem we face is confusing health insurance and the costs of routine care.
Looking at Homeowner’s Insurance may provide some insight.
If we expected the same things from Homeowner’s Insurance as we do from health insurance Homeowner’s Insurance would cover the cost of replacing light bulbs, worn out appliances, re-sodding our lawns every year or repairing the predictable cracks in concrete or asphalt driveways due to normal wear and tear.
Homeowner’s Insurance COULD do this but it would cost a lot more than it does now. The cost of replacing that burned out kitchen light bulb that costs $2.50 at Walmart would cost $4-5 if insurerd because the costs of claim processing would be added to the acquisition cost for the bulb.
Of somewhat greater concern would be what would happen if Homeowner’s Insurers spent a large portion of their premiums on such routine claims? If insurers spend 50-60% of their premium revenues on the most predictable losses where would the money come from when a tornado hits, a hurricane strikes land, or an earthquake causes billions of dollars of insured losses?
The answer of course is that there would be little if any money available for rare high cost claims if all the money is spent on routine claims.
So yes, we do need hyper-efficient, routine health care services. But we cannot treat these routine services as though they solve our health care finance woes because they do not. The real costs of health care are not routine annual blood testing, vital signs taking, or even the cost of chronic care for conditions such as diabetes, hypertension or asthma. These costs are high but they are not the costs associated with extremely invasive surgical procedures, state of the art cancer treatment or long term care for the aged and infirm during the last months and years of their lives.
A system that meets the routine health care needs of all Americans is a necessary but not a sufficient component of the answer we need. A system of affordable health insurance that covers the costs of rare, high cost health events that exceed say $500-1,000 per year is the hard part of the solution. The provision of the services that cost less than this amount is relatively simple, though not necessarily any more politically feasible than the hard part precisely because voters, politicians and health care analysts tend to confuse the two components.