Copays and Consequences

My top tips for HR departments during open enrollment to enhance healthcare literacy by focusing on consequences rather than copays.

Today's healthcare landscape continues to evolve - so has the education Employees are receiving also kept pace to help avoid the most common hurdles and landmines in the system itself? In this article I'll review the challenges, and solutions, to help ensure better outcomes for your Employees, their overall satisfaction, and even the vitality of your health plan long-term.

Imagine taking a college class where there was one 60 minute class session, the course material changes every year, and a pop quiz that could come at anytime in the next 12 months, determined whether you passed or failed. This is exactly the way many approach their Benefits Education for their Employees. Open enrollment should be as much about how to interact with the supply chain itself, as it should be what it will cost you in doing so.

Years ago, an Open Enrollment sounded like this:

If you go to a PCP, your copay is $10, but if you go to a specialist it's $20. You pay $25 for labs, x-rays, and scans.

Now it sounds a lot more like this:

If you go to a PCP your copay is $25. If you go to a specialist it's $50. If they send you for tests, it's $50 for labs, $100 for an x-ray, and $500 for a scan, unless it's in a hospital, in which case you pay a $250 facility fee. All of these are after your deductible of course.

But why? This is what I refer to as the auctioneer effect of Open Enrollment - it literally sounds like we are auctioning cattle, instead of seeking medical care. If you've never been to a livestock auction, see video at end for an example.

Challenges.

There are many challenges in the modern terrain of healthcare. Costs are higher, plans are more confusing, and the system itself is becoming more and more difficult to navigate. What doesn't help is that literacy rates, especially healthcare literacy rates, are not keeping pace.

The end issue is that low health literacy translates to all of the following, according to NIH:

Only 12 percent of adults have Proficient health literacy, according to the National Assessment of Adult Literacy. In other words, nearly nine out of ten adults may lack the skills needed to manage their health and prevent disease. Fourteen percent of adults (30 million people) have Below Basic health literacy. These adults were more likely to report their health as poor (42 percent) and are more likely to lack health insurance (28 percent) than adults with Proficient health literacy.6

Low literacy has been linked to poor health outcomes such as higher rates of hospitalization and less frequent use of preventive services (see Fact Sheet: Health Literacy and Health Outcomes). Both of these outcomes are associated with higher healthcare costs.

All of these translate to issues that can be catastrophic to the patient, as well as the health plan itself. Educating members, and even building health plans with intention can help to alleviate or even eliminate these issues. The goal is to empower the patient in the process. 

One of the driving factors in this is also the fact that Open Enrollment education occurs only once per year. Instead, looking at ways to help keep members engaged in understanding how healthcare works can provide a huge lift as well. Many of my clients choose to do a mid-year "State of the Union" on Benefits, where we simply address the common issues, along with micro-surveys to address these issues, and more.

The six most damning words that created the issues we face in healthcare today are: "Don't worry insurance will cover it."

Groundwork

Before we get into the tips, we do need to ensure that Employees understand the health plan terminology so they can understand how it works. Here is how I put it out there:

• Health plans generally work in three different phases.
• The 1st phase is generally the deductible phase. This is where you are responsible for paying the cost for all services, until the deductible has been met. If your plan does not have a deductible, skip to phase 2.
• The 2nd phase is copays and coinsurance. Once the deductible has been met, or for plans that do not have a deductible, you start cost sharing with the insurance company.
• Copays are easy - these are flat dollar amounts you pay, and your plan pays the rest. Coinsurance is a percentage cost share, where you pay xx% and your plan pays the remaining xx%, as long as you are in-network.
• The 3rd phase is the out of pocket maximum. This is your financial safety net. If you add up your deductibles, copays, and coinsurance, and you reach this point, this is when the health plan takes over as long as you are in-network. IT IS NOT THE GOAL TO HIT THE OUT OF POCKET MAXIMUM.
• All of these apply as long as you stay in-network. If you go out of network, you are exposing yourself to balance billing, which is 100% your responsibility and not covered by the plan. (I then follow up with an example later).

Easy enough, right. It's more complicated than this, but it's a good start, and framework to begin with - before I move into describing the plans and providing the below tips.

5 steps for choosing the best doctors.

Choosing the best doctors to start, is always the goal. A trusted physician partner can serve as the hub, and provide the spokes, for you to have a well rounded healthcare experience. Often, the only advice that's given is, "You should really stay in-network. Please go to ABC Carrier Website to confirm participation" but it's bigger than this. Here are some tips to help:

1. Are you in-network? Confirming in-network participation is generally the best first step, assuming your plan has a network. Look on the website, and then call to confirm in-network participation. Don't let them tell you "we accept all insurance and submit claims on your behalf" rather ask them to confirm "but do are you an in-network participating provider with ABC Plan/Network?." I always cover balance billing, since this is the most powerful "why" in this equation.
2. Expand your research. If I want to find a good restaurant, I go to Yelp. If I want to hire a handy man, I go to Angie's list. Where do you go to find a good doctor? Generally I recommend starting with the picture perfect PCP I mentioned above, and then start to rely on them for advice, recommendations, and more, but don't be afraid to do your own research. Warning: Many of the sites intended to help with finding the best doctors may not be a good resource. Do you have a friend that uses the same doctor, and lived to tell about it? Dead patients cannot provide bad reviews. Case in point, check out the review posted above for Christopher Duntsch, aka Dr. Death, who is serving life in prison for maiming and killing his patients (you should also checkout the podcast). You can see the full review here (which is actually getting worse as many are now posting negative reviews after just listening to the podcast) https://www.vitals.com/doctors/1x6zbk/Christopher_Duntsch
3. Ask questions. You should really show up with a short list of questions, if nothing else. Being prepared for the appointment, you can engage in a real conversation with your provider, that you can drive and control. This way you can get the tough questions out of the way, and start to make an informed decision as to whether this is the best doctor for you and/or your family.
4. Get 2nd opinions. Let's say that you think you love your doctor, you're getting along well, but then they recommend an invasive and/or costly therapy to help with a condition you may have. There may not be any harm in getting a 2nd opinion at this point. This is sometimes the best advice I can provide. Personally, I had this same experience. Doctor 1 stated "more than half the time you will need surgery." Doctor 2 stated "do this first, and 90% of the time I'll never see you again." Guess which doctor I chose?
5. Set an appointment before the appointment. Whether a first or second opinion, this can really help. If you don't have a PCP, or if you have a condition that you are looking for specific guidance on, you should ask for a consultation prior to your first visit (there is a difference between the two). I shared my experience in the post below, when looking for a pediatrician. You'd be amazed at some of the responses I had out there, but this was a really good investment of time and we've really loved the practice.

Here is a personal story of our appointment before the appointment:

In the future, I think that we will see AI play a big role in helping to guide these experiences, and even now, we have tools that help to provide 2nd opinions on the fly. In a fee for service healthcare system, you can never be too cautious about ensuring that you have a doctor who has your best interests at heart, and actually provides (not just promises) great outcomes at the same time.

5 Steps to Save on Prescriptions

Prescription spending is a huge issue. It is anticipated that by 2025 half of all healthcare spending will be on prescriptions, so what can we all do about it?

1. Buy your prescriptions where you buy your peanut butter. Do you buy Peanut Butter at the pharmacy? No? Then where do you buy it and why? The same rule applies to prescriptions, in most cases. This type of out of the box thinking may seem really simple, and it's because it is - but that's the goal anyways.
2. Talk with your doctor about lower cost options. In our micro-surveys, I want to know "Have you talked with your doctor about medications you saw on TV?" and also "Have you asked your doctor about lower cost medications?" The good news is that we see higher rates of those affirming the 2nd response. The primary challenge is that many doctors aren't even aware of the actual cost of the medication they are prescribing (ignorance is bliss). Good doctors will understand these options, and even the placebo effect of many medications, to help patients better understand their options. You should also ask your pharmacist about these options as well, especially since they commonly will see that two 500mg Metformin is lower in cost than a single 1000mg Metformin. Fun fact: pharmacists in other countries have the authority to prescribe prescriptions at the pharmacy counter depending on the condition. Thank you to K Street here in the US. *Note: Yes I understand that sometimes the generic equivalent or other options may not have the same ratio, or mix of active ingredients, which is why it's something to talk about with your doctor, and not your insurance broker or carrier.
3. Understanding penalties and costs vs copays. Many simply consumers don not understand why they are paying the delta between the generic cost, and brand cost - or why the drug may be subject to prior authorization. Touching on these topics can help to point them back to their doctor or pharmacist to better understand their options, as highlighted above. You'd be amazed at how many folks pay the higher cost, and then move on. The same can be said for really looking at the retail cost, and if lower than the copay, to ask for money back from the pharmacist. Understanding the true cost is especially important for HSA's, and any other plans with integrated deductibles, so providing them with tips to look at EOB's, and more to see their cost can be really helpful in the decision making process.
4. Manufacturer Assistance and Mail Order. The most expensive medications often come with manufacturer assistance programs, which I've seen work in some cases for individuals making up to $110,000 per year. This provides sometimes immediate, short-term cost relief to consumers, but can pay big dividends if you are working with a non-traditional PBM, especially when it comes down to getting members engaged in outside programs. The same is true for mail order - as medications mailed from Kansas may still be more expensive than a medication mailed from Canada. An estimated 8 million Americans order medications from overseas.
5. Paying cash or with coupons. This one is perhaps the trickiest to navigate, unless you have high healthcare literacy. The reason why is because often times these sorts of purchases will not count toward your out of pocket accumulators. This can be an issue if you are early in the year, and picking up high dollar medications. Instead, consumers should ensure that medications are run through insurance first, and then any applicable coupons are processed. The same is true for paying cash, so you want to be careful when paying the cash price. For a member who has $0 toward a $3,000 HSA deductible, picking up a medication that costs $1,500 with insurance, or $900 cash/with a coupon on the eve of their deductible resetting, this can make sense. Again the goal of education is to point out the landmines, which this certainly can be as well.

6 Tips to Save on Medical Care (and/or even have better outcomes)

Medical care is where roughly 70% of all healthcare spend will go for you, as well as your Employees, yet it is littered with the most challenges to the average consumer. Here are some which are those I most commonly address in open enrollments to promote education, and better outcomes both physically and financially. We all know to visit an urgent care instead of an ER (when possible) but what about Free Standing Emergency Rooms?

1. Avoiding facilities with a Hospital Name on the building. When a member visits a Hospital Owned imaging center/lab they are often exposing themselves to a exponentially higher cost service, as opposed to an "ABC Imaging Center" which is freestanding/separate from the hospital. Recently I had a lower lumbar MRI at a cost of $450 at a freestanding facility, as opposed to the $1850 charge from another imaging center. This is a huge spread in cost, and for someone where the service counts toward the deductible, can be an expensive mistake.
2. Treatment cost estimators. The above guidance is very general, but a rule of thumb. For more detailed research, you can visit your health plans' Treatment Cost Estimator. Many (not all) plans include these, so knowing whether it does, and how it works can be a huge help to members. You should point these out if available as it can provide more certainty during challenging healthcare situations. Most of these operate off of recently submitted claim data, so they are generally accurate, but issues can still arise based on the scope of treatment and items billed for.
3. Beware of cover charges. Along the lines of #1 as well, many plans will bill the member for facility fees for services rendered in a hospital. Your members should know if these are included, if so what the cost to them would be, as well as how to navigate around it. For a Freestanding Emergency Room these can be over $1,000 per visit.
4. Virtual Care Options. Healthcare has lagged the rest of the world as far as technology goes, by as much as five years according to many experts - however it is catching up quickly. One good example of this is in the form of Virtual Care, or Telemedicine. While not all plans include a robust Telemedicine option, they are certainly growing in popularity, and most all plans include even simple solutions to treat over 60 conditions. By leveraging these solutions, members may save, but they should be well educated on the pitfalls as well. A good example is that we cannot administer medical tests through a smartphone (yet) so it may require an in-person visit for a culture, test, and more. Preparing for your visit by being able to succinctly articulate the issue, even telling them your temperature, medications that you are taking, or have worked int he past can help. If it's a true Emergency, or even questionable as an Emergency, please use your best judgement and go to the ER.
5. Patient Advocates. Before you leave the hospital, get the contact information for the patient advocate. You will inevitably have an issue that arises. I've relied on my patient advocate to resolve issues for a lost knee brace, an out of network anesthesiologist, issues with DME vendors, and more.
6. Site of Service is Everything. Consumers are very well educated on the Urgent Care vs. Emergency Room example, but going a step further to apply this same logic to surgeries, routine treatments, infusions, and more is the next step. Take a look at the chart to the right as a good example for this. Again, all of this logic applies to many other treatments, so encouraging members to seek care at other facilities, even at home, or from their regular doctor (all when possible) are great tips bundled into one simple piece of advice. The chart below does a good job of highlighting this issue, and is a part of a larger report you can review here: https://www.unitedhealthgroup.com/content/dam/UHG/PDF/2017/Freestanding-ER-Cost-Analysis.pdf?la=en

5 Bonus Tips:

• What's your radius? When starting a healthcare journey, I make every effort to avoid STARTING at the hospital. More than half of all doctors in the US are "owned" by hospitals. By starting here, are you sure that you will be able to have the widest health purchasing radius possible, or will your options be limited to their peers? They wont admit it, but if you start there, be sure to ask if they refer outside the hospital.
• Who created these plans anyways? Take ownership of your plan, and design a plan with intention. This can help to alleviate, or even eliminate many of these hurdles, landmines, and more. Partner with best in class solutions and resources to give your Employees the best chance possible to succeed - even looking at solutions for concierge/white glove services to guide them.
• Know your neighborhood friendly drug dealer. Try to be consistent with where you are getting your prescriptions from your pharmacist. This can help to ensure that they know you as a person, and can help to ensure that they are also looking out for your best interests.
• How well known is your doctor? Good doctors are generally well known by peers or at least by Google. If they are really that good, chances are they spend more time writing and conducting research than they do advertising. It's amazing what you can find for abstracts from medical journals and more. You may even come across alternative treatments that you can ask your doctor about. Good doctors will be happy to help, and even take on your tough questions.
• Keep notes. This can be very helpful for having all of your information handy - including which prescriptions you are on, which other doctors you've seen, and more. 12% of Americans have five or more chronic conditions, which can translate to five or more doctors, and five or more prescriptions. Sometimes you are your own best advocate when it comes to coordinating care, avoiding adverse drug interactions, and more.

Conclusion

Now we have 20 tips over three of the main subject areas to touch on during an open enrollment - and in not a single one do we discuss a copay. The best part is that this is only about half of the information I share with Employees during Open Enrollment and Mid-Year briefings. All of this is designed to help better educate consumers, elevate health literacy, and empower them to take control over their healthcare choices.

Keep in mind, I'm not a doctor or pharmacist - but I used to be a teacher.

Now, take a look at the best auctioneer out there, and ask if this sounds like the open enrollment you want for your Employees - because if you're only talking about copays, you sound like this, but not as cool.