High deductible health plans (HDHPs) will be a major driver of change for patients and providers and could be the spark that ignites a truly seismic change within healthcare, i.e. the advent of consumerism. The IRS defines HDHPs, for calendar year 2015, as a health plan with an annual deductible that is not less than $1,300 for self-only coverage or $2,600 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,450 for self-only coverage or $12,900 for family coverage.¹ HDHPs do not only apply to the privately insured; in fact, they are on the rise across the nation. In 2013, 32.5% of patients under the age of 65 had an
HDHP, representing a 1.4% increase from 2012² (76% of the individual products offered on the exchange also qualify as HDHPs³). With an estimated 30 million new potential enrollees entering the healthcare system through the Affordable Care Act, this is where consumer choice can really impact healthcare:
- Out of pocket expenses are rising and will no longer be trivial for patients. Patients will quickly recognize out of pocket cost implications of consuming healthcare services in different settings and many will subsequently change how they make decisions regarding their care delivery. This change in consumer behavior is already impacting healthcare as hospital services are declining, giving way to a rise in ambulatory delivery centers such as urgent care and ambulatory surgical centers.
- HDHPs come in many shapes and sizes and are not always clearly understood by patients, shifting the burden of education to providers. Where clinical educators once served a valuable role in delivering better, more comprehensive care, the role of financial educators will become more prominent. It is imperative to both payers and providers that the patient consumer fully understands the care delivery options and the costs associated with their plans so that they can make informed decisions.
- Going forward, a larger percentage of providers’ revenue will come directly from patients; which will force many providers to adapt front end revenue cycle management workflows and technology solutions to improve pre-service and point of service collections to avoid bad debt and increased A/R days. Stronger communication with health plans will enable providers to make adjustments and deliver more accurate estimates to patients for their out of pocket expenses, increasing the ability to capture payment pre-service.
- 27% of health exchange plans will be for newly insured enrollees4. While this represents new revenue opportunities for providers, in order to maintain, or even reduce costs, it will be critical that these patients be properly assimilated into the system. Administrative rigor and further education from providers is required, as patients who previously accessed care through the more expensive access points, such as the ER, will now be assigned primary care physicians. To maintain margins, it will be critical that they change their care behavior and embrace that lower cost access point for treatment.
- 33% of patients enrolled in a health exchange plan, as of March 2014, are between the ages of 18 and 355. This demographic is typically healthier, requires less care, and therefore, provides opportunity for higher margins or much-needed cost recovery. They are also savvier consumers. Providers and payers will covet and market to these enrollees, which increases the value of ‘brand’ in healthcare. Annual enrollment give patients the choice to change plans each year, forcing service-providers to engage with patients in new ways, with vehicles such as social media, value-added services, and convenience options to grow patient retention.
 http://www.irs.gov/pub/irs-drop/rp-14-30.pdf  National Health Interview Survey conducted by the Centers for Disease Control and Prevention and the National Center for Health Statistics.  McKinsey Center for U.S Health Reform. http://healthcare.mckinsey.com/exchange-product-benefit-design-consumer-responsibility-and-value-consciousness  McKinsey Center for U.S. Health System Reform. Individual market enrollment: Insights into consumer behavior at the end of open enrollment  Health Insurance MarketPlace: March Enrollment Report. March 11, 2014.