Consumers Are Swimming in Health Care Costs - Is There a Life Raft?
Giovanni Colella, MD
Co-founder, Co-CEO and Executive Chairman at OODA Health and Co-founder and Executive Chairman at Brightline (formally Emilio Health)
Every year, the Kaiser Family Foundation and Health Research and Educational Trust surveys employers about their health insurance buying habits. Not surprisingly, the survey highlighted what we already know – health insurance premiums are rising at an unsustainable rate. In response, corporations are turning to high-deductible or consumer-directed health plans at a record pace. In 2012, 42% of firms with more than 1,000 employees reported that they offer a high-deductible plan to their employees.
A high-deductible plan, if you are not familiar with the term, requires workers to satisfy a deductible of a couple of thousand dollars out of pocket before insurance kicks in. And while the concept of high-deductible plans encourages consumers to accept greater responsibility and accountability over their care, currently these consumers have no real access to the information they need to manage their health care costs. And as I mentioned in a previous post, costs can vary wildly, remaining one of the great mysteries in health care.
For instance, a CALPIRG study recently noted that a knee replacement surgery in two cities in Northern California ranged from $59,800 at one hospital to $164,400 at the other. While the medical result for the patient may end up the same, the patient and payer would have walked away from the surgery at each hospital with significantly different bills.
With huge fluctuations in prices and no way to understand the difference in costs between providers, can consumers avoid drowning in medical expenses?
As an eternal optimist, I believe the answer is yes. The emergence of health care transparency can offer individuals the life raft they need to make better decisions and stay afloat in a sea of health care costs.
Only at the time when medical cost and quality information is readily available will consumers have the tools they need to control medical expenses. And now that I’ve achieved, maybe consumer-directed health care can actually begin to be directed by consumers.
Giovanni Colella is the CEO of Castlight Health. Castlight Health provides cost and quality transparency through a health care management suite that delivers proven, measurable results for companies and their employees.