Wednesday, June 30, 2004

More health choices, more costs

Consumer-directed health care confusing to many

By Tim Bonfield
Enquirer staff writer

Chris and Kristina Martinez of Fairfield, with Taylor, 2 (left) look at newborns during a tour of Good Samaritan Hospital's prenatal facilities.
Ready or not, more and more people are being forced to make increasingly important - and potentially costly - decisions about their health-care needs.

As part of a national trend sweeping the region, consumers in Greater Cincinnati and Northern Kentucky have more health-care choices than ever: They're choosing among a greater variety of health plans tailored to individual needs and with new levels of financial risk. And as their coverage costs go up, they're searching harder for the best deals on drugs, tests and treatment.

"What we're talking about is getting consumers actively involved in making choices," said Larry Savage, president and chief executive of Humana Health Plan of Ohio. "When you or I buy a new television, we shop around. When we buy life insurance or auto insurance, we compare."

Humana, Anthem, United Healthcare and other insurers are promoting so-called "consumer-directed" health plans in an attempt to control rising costs, the No. 1 health concern cited by residents in an Enquirer poll in January.

Your health, your money
According to this approach, young or healthy people can choose plans with small monthly payments, risking big charges only if they get sick.

Chronically ill people or families with kids might choose larger monthly payments in return for smaller fees at the time of treatment.

The idea is that people paying 20 percent co-payments or $2,500 deductibles will be more likely to question prices, seek out quality information, demand better service and skip unnecessary care. This unleashed consumerism will force hospitals, doctors, drug makers and nursing homes to slash prices, eliminate waste and stop recommending the most expensive treatments when lower-cost options will do, the theory goes.

But if shopping around sounds good, consumers say it's easy to become befuddled. And even the experts are divided about whether the average person has the information, motivation or ability to be a savvy health-care shopper.

"There is some truth to the idea that consumers don't know the costs of their care, but the idea that they'll become smart shoppers is ridiculous. Getting health-care service is not like buying a car. When your health is at stake you'll do whatever it takes," said Trudy Lieberman, director of the Center for Consumer Health Choices at Consumers Union.

Some Greater Cincinnati residents say they would like to get better information so they could save money on health services. But they say comparing services - be it on price, quality or both - is harder than it should be.

Symmes Township resident Bonnie Fair said she can't do much health-care shopping beyond comparing drug prices at pharmacies.

"The insurance company dictates what and where you can get service," she said.

Wilmington resident Susie Chaney said she asked about fees before getting an outpatient surgery in January. The doctor's staff quoted a fee right away. But the hospital wouldn't provide a dollar amount, saying there were too many ways that charges could vary.

"Based on my experience," she said, "I would say it's not easy to obtain a set price."

Consumer-directed plans

Two years ago, Louisville-based Humana Inc. - which runs the former ChoiceCare plans in Cincinnati - was among the first nationwide to launch a consumer-directed health plan.

The company's "Coverage First" option allows people to spend $500 a year on any medical expense, be it doctor visits or medications. Then, depending on the employer, members pay for the next $500 to $2,500 in medical expenses. After that, such plans typically pay 80 percent of the bill, up to a maximum limit that varies by employer.

Humana offers this low-cost insurance option as part of its "SmartSuite" benefits that allow employees to choose from multiple health-plan options with paycheck deductions that can range from $1,800 to more than $4,000 a year for family coverage.

Knowing that such complex choices can confuse people, Humana and other insurers have created computer programs that walk people through the process.

Humana's Health Plan Wizard helps employees choose a plan that best fits them. The system can even tap into a person's past medical claims to show how much a person would pay under the different plan options.

In Cincinnati, 19 companies have purchased Humana's SmartSuite product, reflecting about 20,000 of Humana's 400,000 area members.

For Applesauce Inc., a local company that runs out-of-town Applebee's restaurants in four states, adopting Humana's new-style plan for 380 employees reduced the company's projected double-digit premium increases to 6 percent last year and 9 percent this year. In general, employees found the computer wizard helpful and easy enough to use, said Scott Cortner, vice president of human resources.

"They understand how health insurance works much better," Cortner said. "And I'm no longer making one-size-fits-all choices for employees."

Lieberman said consumers may never have the ability to shop around for health care like they do for cars and houses.

"I know that the free-market crowd wants to move people more in that direction, but the public isn't there,'' Lieberman said.

Can consumers benefit?

Critics of the movement say four major obstacles stand in the way of better health-care shopping:

• People don't consider costs when lives are at stake.

After a heart attack or a car wreck, people don't have time - and may not even be able - to shop around. They go to the closest hospital, get care from whomever is on duty that day, then sort the bills out later.

That means - for good or ill - that ambulance drivers, doctors and other people will continue to decide how billions of health-care dollars will be spent regardless of how much financial burden is shifted to the consumer.

Even for maternity care, where couples have months to select a birthing center and hospitals send out promotional CDs offering virtual tours of their programs, few people actually shop around.

At Good Samaritan Hospital in University Heights, none of the half-dozen expectant mothers in a tour group last week said they compared prices or quality statistics or toured more than one hospital.

Fairfield residents Chris and Kristina Martinez chose Good Samaritan even though a newer birthing center at Mercy Fairfield was closer to their home. They had relatives who had good experiences at Good Samaritan, and they liked knowing that the hospital has the area's top high-risk pregnancy unit.

"This is where my cousin had her baby. And this is where my doctor preferred," Kristina said.

Fairfield Township residents Christy and Matt Kroeger picked Mercy Fairfield because it was close, friends had good experiences there and they liked the idea of having labor, delivery and recovery all in one room.

"We didn't look at other hospitals, but we definitely asked about price," Matt said.

• Most insurance plans still offer few financial incentives for patients to shop around, and some limit shopping choices.

For example, an HMO member who pays $20 for a doctor visit gains nothing by choosing a doctor who charges $50 instead of $100.

Meanwhile, even if consumers do shop around to find the best service at the most reasonable cost, they have to hope that their doctors or hospitals are covered by their health plan.

• Doctors, not patients, still play the largest role in deciding where services are provided.

Even though there may be time to compare hospitals for delivering babies and many other treatments, people develop relationships with doctors and tend to go where the highly trained experts say to go.

"It used to be that physicians would go to two or three hospitals, so people could pick. But now, many say this is the only place I go," said Kim Pickens, clinical director for the family birthing center at Mercy Hospital Fairfield.

• In most cases, people lack price and quality information commonly available for other products and services.

Some health services, such as laser eye centers and plastic surgeons, regularly advertise prices. But for most health services, price information is hard to get.

Thanks to the Internet, consumers are finding more information about diseases and treatments than they ever had before. But even now, very little of that information compares local services head-to-head on costs and quality of care, said Dr. Derek van Amerongen, vice president and chief medical officer for Humana's Greater Cincinnati office.

"There's a Lake Woebegone phenomenon in health care. As far as the public is concerned, all doctors are above average and all hospitals are above average," van Amerongen said. "But there are important differences."

Trend expected to grow

Despite the difficulties, the consumer-directed trend is expected to grow.

As it does, experts say the financial winners will be those who do more to keep themselves healthy; those willing and able to use computer wizards; those who aggressively shop around for health services; and those who can set aside money to cover high deductibles in case they get sick.

The financial losers will be people with chronic illness who feel forced into the most expensive plan options and those who live paycheck-to-paycheck. Lower income people may be tempted to choose a health plan with the lowest paycheck deduction, only to discover they lack the savings to cover bills once illness strikes.

Margaret O'Kane is president of the National Committee for Quality Assurance, the nation's leading accreditation body for managed care health plans. During a visit to Cincinnati this month, she said more data about health-care costs and quality should be made public. But she also said the data that exists on health-care quality remains weak.

"Consumer-directed plans are an innovation. But are people really ready to take on a lot of responsibility?" she asked. "I'm concerned too many decisions will be made based on costs alone."


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