High-deductible health plans put financial health at risk

By | June 27, 2017

In the move to consumerism, where the consumer has financial “skin in the game,” there are two prevailing thoughts: One, that a consumer will be more discrete in their purchasing if there is money coming out of their pocket, and two, that same consumer has the ability to live without the good purchased. Unfortunately one’s need for healthcare does not live by the same economic rules. The ability for an individual to be more savvy about the cost of a service can definitely reduce utilization, but a person does not always have the option to avoid a healthcare service. It is this latter circumstance which can cause huge issues for the financial health of a consumer. They can suffer a financial crisis because of circumstances out of their control.

We have lived in an environment where there has been very little consumer engagement, which has not worked from a cost control perspective. The concern is that if we go to the extreme opposite, other unintended consequences could occur. Poorer financial health as discussed is one, but another is poorer overall health as well. If I am incentivized not to spend money, I will likely put off care that in fact might prevent me from having more costly needs down the road. This dynamic creates a negative fly wheel as I am in fact getting sicker while increasing my risk for financial complications.

We do not need to live in the extremes. The goal should be how we optimize these opposing models of payment. One possible way is to rethink the present day notion of health insurance. Maybe there are better ways for us as consumers to understand our health and financial risks and have options to mitigate that risk while simultaneously improving our health. How do we create financial incentives to not only prevent our health from worsening, but also provide a methodology to avoid financial catastrophe?

As we move to delivering value to those we serve, we must also innovate around the payment models used to pay for services that, at a basic level, are a human right and are not always controllable. Some would call this a conundrum; others would call it an opportunity to create partnerships between the consumer and the system that provides services. We need to move past the idea that the “supply” side will fix these issues and begin to embrace the complexity of the situation and solve together. The solution lies within, and we need to tap all thinking power at our disposal. New ideas will win the day, not just iterations on the old. Let us design new approaches, test them, iterate, and come to a model that protects all types of health – physical, emotional and financial – at once.