By: Jessi Turnure, KARK | Posted: Feb 06, 2019 | Updated: Feb 07, 2019

LITTLE ROCK, Ark. – In his State of the Union address Tuesday night, President Trump called for more affordable and transparent health care costs.

Arkansas is one step ahead of him.

“It’s a small step, but I think it’s an important first step toward unlocking the black box and having us all be able to understand how the health care system works and what it’s going to cost us both in the short term and the long term,” said Dr. Joe Thompson, the president and CEO of the Arkansas Center for Health Improvement (ACHI).

The federal government required hospitals to start posting their charges online Jan. 1.

“The information itself is not that useful for most consumers because what’s charged is usually not what’s paid,” Thomspson said.

The actual payment depends on a negotiation between the hospital and the insurance carrier, and also the design of the patient’s health plan.

Another website recently started to break down the average payment rates for different procedures in hospitals across the state.

“It will stimulate a conversation between the patient and their physician about what procedures are needed, how important they are and where to go to get the best procedure done,” Thompson said.

State lawmakers approved the Arkansas Health Care Transparency Initiative three years ago. Under the insurance commissioner’s authority, ACHI developed the state’s all-payer claims database. It tracks paid claims by insurance carriers.

A company based in New Hampshire, My Medical Shopper, applied to use the data.

“There has been anxiety about putting new, real information out on what health care costs, to actually shine the light inside the black box,” Thompson said. “Health insurance carriers are concerned, hospitals and providers are concerned.”

Hospitals in the area told KARK they plan to continue to “provide quality, compassionate care to all our patients in the most cost efficient manner possible.” They also said patients can call the hospital’s financial counselors for specific and personalized information.

To register for free to access the data on My Medical Shopper, click here.

“Users of our platform, which is accessible through our website as well as easy-to-use mobile applications, can find price estimates that reflect the insurance-negotiated discounts for thousands of medical tests and procedures before they seek care, rather than falling victim to surprise medical bills weeks or months after the care has already been received,” said Christopher Matrumalo, My Medical Shopper’s VP of Marketing. “We sought to work with ACHI because their Transparency Initiative’s stated goal is ‘to empower Arkansans to drive, deliver, and seek out value in the health system.’ We have found ACHI to be committed to this goal in practice, and we believe that our collaboration has introduced a powerful new dynamic to the healthcare marketplace in Arkansas.”

The website is the first of many that could make data like this available to Arkansas consumers. Thompson said other commercial entities and researchers have applied to gain access to the state’s all-payer claims database.

An advisory board reviews the applications to make sure there would be a benefit to Arkansans. The insurance commissioner ultimately approves the use, and ACHI provides the data to them.

According to the All-Payer Claims Database Council, 21 states have an existing database, 15 of them, including Arkansas, require submissions. Five other states are in the process of implementing one, and others are strongly considering it.

This article and news video originally appeared on February 6, 2019 on the NBC KARK.com website here: https://www.kark.com/news/local-news/know-before-you-go-website-posts-prices-of-medical-procedures-in-arkansas/1760252094

The long, confusing journey to find the actual cost of a medical procedure

Bob Sanders’ Pedaling for Payson ride to raise funds for Concord Hospital Trust landed him in the hospital’s emergency room.

PHOTO BY JAMES WANG

Blood in my urine. 

That’s what I saw on Sept. 15 while inside the portable toilet in Warner at a rest stop some 65 miles into my 77-mile ride to raise money for the Concord Hospital Trust to help cancer patients.

It was not the first time my urine was red on a long bicycle ride, but this time I would not panic. This time, I would not walk blindly into the Concord Hospital emergency room for no good reason and exit with a bill that I was still paying off. 

This time, I would know what the heck I was getting into and how much it would cost me.

It took a month to find out that, in order to save thousands of dollars, I had to put off a medical procedure until next year, thus risking landing in an emergency room, which could cost the health system more than I was trying to save myself.

But that’s the trade-off patients now have to make in the new world of high-deductible health insurance.

High deductibles used to be the exception. Now they are the norm, particularly in New Hampshire, where high-deductible plans are held by the highest percentage of policyholders in the country.

Nationwide, the total amount of deductibles paid by employees tripled from 2008 to 2017. The average individual deductible doubled to $1,500 in that time and the number of those with plans including deductibles rose from 60 to 81 percent, according to a 2018 Kaiser Institute study.

In New Hampshire, 69.3 percent of employees had high-deductible plans (more than the $1,300 individual threshold used for health savings account eligibility) in 2017, according to data from the University of Minnesota’s State Health Access Data Assistance Center. It was the highest percentage in the country. 

The state also has the highest average family deductible ($4,381) and the second-highest individual deductible ($2,303), just $2 below Maine. In 2016 New Hampshire was ranked first in the average individual deductible as well. 

(The prevalence of small businesses here might be a contributing factor: The smaller the company, the chances are the larger deductible an employee has to pay.)

The good thing about high deductibles is that they force the consumer to care about cost. But it also has a negative side as well.

During her presentation at NH Business Review’s Oct. 10 Healthcare Confronting Disparities event in Concord, Dr. Joanne Conroy, CEO and president of the Dartmouth-Hitchcock health system, said that people with high-deductible plans “aren’t getting the care they need. They are coming to the emergency for acute care that could have been cared for early on.”

Indeed, a study by the American Diabetes Association indicated that while large deductibles do save medical costs, they also resulted in lower-income patients going to the emergency room.

Bladder stones

My individual deductible is $5,000. Even after my employer chips in $2,500 via a health reimbursement account, I have a high-deductible plan.

I found this out the hard way in 2016, that time on a 100-mile ride to benefit the Concord Hospital Trust. Back then, when I saw my bloody urine, I cut the ride short, went into urgent care at the Hitchcock Clinic. I was sent to the emergency room.

A doctor, who said I was slightly dehydrated, wanted to hook me to an intravenous bag. Way too costly, I said. I just drank a lot of water and was given a CAT scan with negative results because it wasn’t done correctly. When my urologist redid the scan, he found that stones in my bladder knocked about during the long ride, causing the bleeding. He sucked them out though the urethra, laser-blasting those too big to fit. I had no idea how much that cost, nor did I care, since I had already blown though my deductible in the ER.

This time, I figured they could just do it again. Sure enough, my urologist eventually confirmed, I had a “ton” of bladder stones again, and I should have them removed again, or they could block up the urethra, resulting in extreme pain and another ER trip.

But, he added, this is a recurring problem because my enlarged prostate prevents me from totally emptying out my bladder. The solution? Drill a pathway though the prostate.

The procedure — known as transurethral resection of the prostate (TURP) — would require an overnight stay in Concord Hospital (which owned the urology practice), though it would be less than 24 hours, so it would qualify as day surgery.

He had no idea, nor much concern, about how much this would cost me.

‘Sticker price’

I tentatively signed up for the procedure, scheduled in two weeks, the Friday before Columbus Day. Then, armed with procedure codes, I proceeded to do my homework.

First, I called the cost information number on the urologist’s pre-op literature. I got a message inviting me to leave a voicemail with my procedure number and other information to get a cost estimate in 48 hours.

While waiting I called Anthem, my insurer, which confirmed that I had hardly touched my deductible, so I was on the hook for almost $2,500 after my employer reimbursement. Anthem told me the surgeon’s negotiated fee: $1,949 for the TURP and $812 for the bladder removal. But didn’t tell me the combined fee, nor the cost of the hospital and anesthesiologist because they vary so much.

The anesthesiology cost depended on the method, which — the urologist’s office told me — would only be revealed at the hospital before I was rolled into the operating room. 

Concord Hospital (which called back more than four working days later after repeated messages) could only give me its “sticker price” — $28,000 to $41,500 — not the negotiated price with Anthem.

Anthem couldn’t tell me what that was either, but I was told that, since it would probably blow through my deductible anyway, what difference would it make?

It was only after I contacted Concord Hospital later on as a reporter that the hospital told me the negotiated price, including surgery but not anesthesia, was between $19,000 and $26,000 but “as a general practice we don’t disclose that,” said Tom Antinerella, director of patient access, explaining that contracts with the insurers were “proprietary” and besides, “it’s kind of a moot point, because if it’s more than your deductible it’s irrelevant.”

But I was still trying to make a decision, so I went on the state Insurance Department’s transparency website, nhhealthcost.nh.gov, which gives the negotiated rate on over 100 common procedures, including 22 surgical ones, but not mine.

Then I called Vitals SmartShopper, a company that works with my employer and Anthem and actually sends you a check if you go to the cheaper provider. However, my procedures were not included in our contract, so they couldn’t give me any cost figures. 

Anthem later told me as a reporter that SmartShopper would have helped me with another operation — kidney stone removal — which has a different procedure code. The public information office also referred me as a journalist (but not when I called as a patient) to check out a tab section of Anthem’s website, called “Estimate Your Cost,” which allows you to compare the cost of a number of procedures, like kidney stone removal, but not bladder stone removal or TURP, so it wouldn’t have done me any good in any case.

Ambulatory surgical center

Time was ticking by. I called back the Center for Concord Urology practice and asked how urgent it was for me to get the bladder stones removed right away. Not very, I was told. So I canceled the procedure and continued my search.

I vaguely remembered during an employee health meeting that it would be much cheaper if I went to an ambulatory surgical center. My urologist did say the procedure required an overnight stay at the hospital, and Anthem didn’t suggest it, but I figured I’d give it a try. After numerous phone calls, I learned Manchester Urology Associates performs these procedures at Elliot Health System’s ambulatory surgical center, Elliot at River’s Edge in Manchester.

Manchester Urology said its negotiated fee was $3,800. The River’s Edge’s sticker price was $3,650 for the bladder removal and $9,105 for the TURP. Amoskeag Anesthesia’s sticker price was $1,500, negotiated down to $1,300, based on the average number of hours the procedure takes.

But all this was irrelevant after I called Anthem, which told me that all I would have to fork over was a $250 co-pay. That would cover the doctor, the facility, the anesthesiologist and even some lab work.

But as a new patient, I wouldn’t get to see anyone in Manchester Urology until early next year. 

So betting to save $2,250 that my bladder stones will stay put for another three months, I set up the appointment. If I lose the bet, and wind up in the ER, I’ll only pay the same amount if I scheduled it at Concord Hospital. But the insurer would pay a lot more in dollars, and I could pay a lot more in terms of my health. Wish me and the health system luck. 

Another tool

It turns out I missed one important resource when trying to determine medical cost: MyMedicalShopper, started by Mark Galvin, a Portsmouth entrepreneur. I had even done a story about the company the year after it started up in 2014. 

MyMedicalShopper has since gone national. Galvin has even been invited to the White House twice to talk about how price transparency can save the healthcare system, and Medicare in particular, billions of dollars. 

It started up in 2013 when Galvin finally got a CD-ROM of actual claims data from the state. That data has since been updated every three months and augmented by the company’s customers, both businesses and individuals. 

Like the state and Anthem sites, the data revealed a vast disparity of prices for some common procedures. Anthem, for instance, pays one provider $22 for an x-ray and another $327, with payments ranging from $335 to $4,221 for an MRI of the lower joint. 

But MyMedicalShopper has information for a lot more procedures, including mine. Bladder stone removal prices range from $388 (at River’s Edge) to $6,112. And TURP costs range from $1,565 to $8,424. (The combined high estimates are actually $4,000 lower than the price provided by Concord Hospital, underscoring that the results were either off the mark, or not up to date, or that the hospital’s estimate was too high.)

But if MyMedicalShopper gets its data from the New Hampshire Comprehensive Health Information System — a result of a law mandating such transparency — why doesn’t the system website include the hundreds of other procedures included on MyMedicalShopper?

Most likely it’s “due to the relatively low frequency of the services in the commercially insured population and/or a high amount of variation among patients receiving the services,” explained Tyler Brannen, director of health economics at the NH Insurance Department, thus the state could not vouch for its accuracy.

But Galvin blames it on restrictions that the carriers put on use of the data. Brannen, however, said there are no restrictions on which procedures would be included on the database.

According to Galvin, however, carriers may say they want the transparency that will send consumers to low-cost providers, “but they really don’t. Carriers want to keep it a secret.”

He said that’s because of a rule that, in most circumstances, limits an insurer’s surplus to 20 percent of medical losses. The greater the medical losses, the greater their profit, argued Galvin.

When asked to respond to this, Anthem issued the following statement:

“Consumers rely on Anthem Blue Cross and Blue Shield to provide broad access to affordable, quality healthcare services. Prices for the same service can vary greatly from provider to provider, even those in the same area, which is why we work with consumers by providing them information and tools so they can be better informed about selecting the right care provider based on quality and possible out-of-pocket costs.”

The tools listed were the Estimate Your Cost website, the SmartShopper program, live customer support and benefit design. The first three tools failed to inform me of the cheaper alternative that was available under the latter. I had to come up with the information myself.

In some ways, this story has a happy ending. I was eventually able to get a rough idea of the negotiated costs and was — albeit with some delay and risk — able to find a cheaper alternative. But is this evidence of price transparency? Or is it an example of how difficult it can be to find out the cost of your very own healthcare? 

This article appears in the November 9 2018 issue of New Hampshire Business Review, published directly here: https://www.nhbr.com/November-9-2018/A-tale-of-healthcare-transparency/

Q&A WITH MARK GALVIN, CEO OF MYMEDICALSHOPPER

According to a recent Reuters article, researchers at the University of Toronto contacted 120 U.S. hospitals in 2011 and then again in 2016 seeking price information on hip replacement surgery. The number that could provide price information dropped from 48% to 21%, and those that couldn’t provide any information rose from 14% to 44%. How is this happening with all the price transparency efforts?
GALVIN: If you are insured, insurers often won’t tell you what the rate is, because the carriers consider the negotiated discount proprietary information. Providers say they have complied with transparency legislation because costs are buried eight layers deep somewhere on their website. And this works because the consumer is not involved in the cost of healthcare. They have been so isolated for so long from what’s billed and what’s paid that it has become a broken market. The consumer got into the mode where you pay a co-pay and you don’t care that at one place you pay it and the underlying cost to the plan, paid for by employer, might be a $50 actual expense but at a different place it might have been $500 for the same thing.

Galvin is an advocate of improving transparency efforts to reveal healthcare pricing while implementing high-deductible health plans and health savings accounts. These steps, he says, could not only reduce employers’ and employees’ healthcare costs but could also help transform the system overall.

Is the system contributing to the lack of transparency in any way?
GALVIN: It used to be that brokers were compensated as a percent of premiums and they kind of liked the fact that they were going up because it was an automatic raise. They would come in and say, ‘Sorry employer, your premiums are going up this year 25%,’ which was not unusual. The employer would say it couldn’t handle that, so they would lower the premium but do it by imposing a deductible or bigger co-pay. The insurance carriers have pushed these things that create optics for the patient where they still never become engaged in knowing what stuff costs.

We are keeping people blind by creating co-pays or doing things like paying for every employee’s flu shots. You don’t pay anything as the patient, but those shots may have cost the plan $200. And you didn’t realize that the shot isn’t free. Instead, they could have come into the office under contract and given everyone a shot, and instead of costing $200, they would have only been $20 apiece.

You are a proponent of price transparency coupled with high-deductible health plans. How do those have the potential to change the system?
GALVIN: High-deductible health plans get rid of the fuzzy optics and expose what things really cost. Initially patients do what they always do: they do what the doctor says, and the first bill comes in and they see the real numbers they have to pay and they freak out.

But if, instead of going to the ER, you went to one of these urgent care centers, it might have cost $200 instead of $3,000. So now people are becoming educated, but they are becoming educated by getting hit over the head with a stick when they see that bill.

How would price transparency change the system if it were working properly?
GALVIN: If you shop ahead, you usually can get between 50% and 90% lower costs. We’ve done some research in Maine, New Hampshire and Massachusetts.

For the state of Maine, we looked at top-100 procedures to see how much people who went for care in Maine with commercial insurance paid last year. We discovered they paid $302 million. We then asked this question: if they had shopped and gone to the lowest-cost place that still had the highest-quality metric according to our data, how much could they have saved?

What we found is they could have saved 43%, or $131 million, on those top-100 procedures. In Massachusetts, they paid $1.5 billion for those procedures and could have saved 40%, or $578 million. In New Hampshire they did a little better; the costs were $578 million, and they could have saved $202 million, just over 39%.

We’re seeing 18% to 27% savings for the bulk of our customers. The differences are often driven by two key factors. First is whether or not the plan design has a financial alignment that drives shopping. The best is where the premium or claims cost savings are shared with the employee in the form of an employer-funded HSA. Of course, that must be paired with a high-deductible health plan, which eliminates the structures that obscure the actual costs from the employee (like co-pays). Second is employer leadership buy-in. When we see the company CEO engaged, we can often see near-perfect engagement from employees.

How was your organization able to get pricing information with such little transparency in the market?
GALVIN: I got the state to give us a version of the database that was a commercial-use version. It turns out there are about 15 states that have these databases, all modeled after the initial one in New Hampshire. We managed to get it from Maine, Massachusetts, Connecticut, Arkansas, Colorado and Utah. Many of these states have succumbed to our analytics team’s explanation of why it is the public interest to get access to the data.

As we’ve been in the marketplace, we have worked with third-party administrators that are releasing claims files for their communities under HIPAA. Under the terms of use, users give us permission to get explanations of benefits sitting in the portal, and we grab the last 12 to 15 months and de-identify it and those bits of data we combine in our database. We now have 3.3 billion claims in our database. We’ve been in New England and launched our national database in August.

How did you get involved in this industry?
GALVIN: I’m a serial tech entrepreneur. I was the first employee in companies I started and had to set up the benefits plans. What I saw was the crazy increase in the cost of these insurance plans and the percentage of the company’s budget that was being consumed by healthcare insurance.

I had been educated on these things called high-deductible health plans and health savings accounts by my physician, who was fed up with being told how to run his practice by insurers. When I started my fourth company, I decided to set up a zero out-of-pocket exposure plan. I got a high-deductible plan—$5,000 or $10,000—with a small premium deduction, and I fully funded their HSAs with the premium savings. That meant they had $5,000 in their account to keep if they didn’t spend it. If they ran out of money they were given to pay bills, they could bring their bills to HR, and they would cut them a check up to the $10,000 where insurance kicked in.

People loved it. It turned everyone instantaneously into caring healthcare consumers. Suddenly they wanted to know costs ahead of time. The company saved 32% on this generous zero-deductible plan. We surveyed the employees, and they had on average saved 75% of the money they had in their HSAs. The next year, premiums dropped by 7%.

This was when I got involved in legislation for price transparency. I discovered the state of New Hampshire had to submit every claim they paid to the insurance department quarterly, so they had this massive database. I decided to create price transparency. At the time, an app called Gas Buddy let you do a search at current location to find out gas prices nearby. We decided to create a healthcare version of Gas Buddy on mobile phones.

Why haven’t price transparency tools or healthcare “shopping” worked well so far?
GALVIN: If you Google this, all of the articles out there say these tools don’t work. And the reality is that, historically, they haven’t worked well.

The reason for that is most of the shopping has been done in a very abnormal way. You go to the doctor, and they send you for a procedure or test. They send the order out, and you are scheduled to go Thursday at 3 p.m. to another doctor or for a test. The shopping platforms in the past have said, “Call us after that, and we’ll help you find a lower-cost place and give you a financial incentive.” They still don’t show you prices, but they have experts who will tell you what to do.

That’s not a natural shopping experience. I love TVs, so how do I find a new one? I Google it or go on Amazon and get a nice clean list of the cost and what the descriptions are. There isn’t a lot of price discrepancy, because people can get that information so readily and are able to shop ahead of time. But most people won’t turn around and change their doctor’s orders; that’s not the way they shop.

How does MyMedicalShopper differ from other price transparency tools, and how do you think it can change how we choose and pay for services?
GALVIN: If you were to grab our mobile app, you pull this thing out while you are with your doctor. Say he wants to send you for a bone density study. You start typing in bone density, and it pops up and tells you everyone locally who does it, how much it’s going to cost you, your insurance discount calculated in, how much will come out of your pocket and what will be paid by the employer and the insurer. And you can say, “Doc, can you send me to this cheaper one over here?”

That’s where the opportunity is. You can make it a natural shopping experience and make it in a platform so they can bring it to their own doctors. It’s easy access at their fingertips, and that makes all of the difference.

Employers and individuals paying for their own insurance are looking for new solutions. This new round of price transparency tools brings the consumer back in. When you eliminate all of the broken optics, they can sit down with their doctor and figure out what works best for them.

What should brokers and consumers look for if they are considering using a price transparency tool?
GALVIN: You have to eliminate the thing where you can’t work with your doctor. Before you leave their office and they have made an appointment for you somewhere else, they need to able to navigate it simply and quickly, and it has to launch on their mobile device.

It has to be as intuitive as Google and give you similar information: where do I go and what am I going to pay. It’s also important to have the quality score. People misunderstand and think the highest price thing is the highest quality, and that isn’t true in healthcare. In study after study, there is no relationship between cost and quality in healthcare. It doesn’t work like other industries.

Don’t complain about the cost of care or inability to provide care for everyone if you are going to continue to be a bad consumer. My worst nightmare is when I go to an employer and they say they have a zero-deductible plan and don’t want to change it.

They could be building a retirement account and get zero out-of-pocket exposure and have a quarter of a million dollars sitting in their retirement account. The result on society in general is that healthcare costs will become a more perfected marketplace where productivity is rewarded like in other markets.

This interview was published on Leader’s Edge Magazine: https://leadersedgemagazine.com/articles/%202018/09/build-pricing-transparency-app-titude

Tools and incentives can spur cost-conscious decisions

BY STEPHEN MILLER, CEBS

Millennial employees, especially, are “shopping” for nonemergency health care providers, although hurdles continue to impede cost-savvy choices for tests and procedures.

Millennial employees—who now outnumber Baby Boomers—are more comfortable with nontraditional ways of engaging with their health care providers and are more likely to apply shopping habits associated with online retail to their health care decision-making, whether in a traditional or a high-deductible health plan, a survey by the nonprofit Employee Benefit Research Institute (EBRI) found.

According to results from the survey published in EBRI’s March Issue Brief, Millennials were more likely than other generations to:

• Check the quality or rating of a doctor or hospital—51 percent Millennial compared to 34 percent Generation X and 31 percent Baby Boomers.

• Use an online health care cost-tracking tool—28 percent Millennial compared to 17 percent Generation X and 10 percent Baby Boomers.

Millennials were also more than twice as likely as Baby Boomers to use a walk-in clinic and more than twice as likely to consider using telemedicine.

“These findings perhaps reflect [Millennials] comfort in researching consumer decisions online, and applying the same consumer habits they use on Amazon or other retail online sites to the health care arena,” said Paul Fronstin, EBRI’s director of health research and education.

Transparency Challenges

While online tools and smartphone apps are increasing available to show price and quality ratings for health care providers, progress toward health care consumerism has been slowed by “lack of proper employee financial incentives and health insurance plans that create disincentives for people to care what the actual cost of a test or procedure is,” said Mark Galvin, CEO of MyMedicalShopper in Portsmouth, N.H., which provides data and tools for health care consumers.

He noted that transparency tools may “lack critical features that make them generally usable by Millennials and others,” such as by:

• Not being “built first for mobile.” The moment your doctor tells you that she is sending you for a test or procedure “is not the time to pull out your laptop and navigate five levels deep into a website to try to search price and quality,” Galvin said. A better solution is to have a user-friendly app already installed on your handy smartphone, making price comparisons “as simple as searching on Google for anything else.”

• Not providing precise insurance-negotiated rates. Some tools display “fair prices” as a benchmark to use when contacting health care providers, or a “green, yellow, red” indication of where in the market-price spectrum a particular provider or facility might be. “These are unfamiliar shopping concepts to people who have grown up with Pinterest, eBay, Amazon, Google and Yahoo,” Galvin noted.

It “would be a big step toward fixing this broken market,” he added, if plan sponsors made sure brokers are not paid based on a percentage of premiums, and if they eliminated structures like co-pays “that create scenarios where the patient pays the same out-of-pocket regardless of the wild price variations within a short travel distance.”

Hospitals and doctors also have been criticized for not making the prices on their services more readily available. While progress toward greater price transparency “at the macro level has stalled—in the sense that the industry hasn’t seemed to make much progress in the availability of transparency data—it hasn’t stalled at the employer/patient level,” said Kim Buckey, vice president of client services at Birmingham, Ala.-based DirectPath, a provider of personalized benefits education, enrollment and health care transparency services. “We’re seeing increasing interest from employers in transparency services and increased use by participants where employers offer these plans.”

As EBRI noted, Millennials are “more comfortable with consumerism—this is the generation that grew up being able to customize just about everything, from how their phones and laptops are configured to how their coffee is made,” Buckey said. Still, “the barrier for them—as for all users of health care—is lack of knowledge of price differences and that they can, indeed, shop for these services just as they shop for those laptops and lattes.”

[SHRM members-only toolkit: Managing Health Care Costs]

HSAs and Consumerism

“Consumers are empowered now to make their own decisions, but they’re horribly unprepared to make really smart decisions,” said Anna Phalen, vice president of customer insights and account management at Jellyvision, an employee communication software firm based in Chicago. “Employees are looking to employers for more options supported by tools to help them make the best choice. It’s become an expectation, like any other benefit.”

‘Consumers are … horribly unprepared to make really smart decisions.’

When communicating with employees about consumer-driven health care plans—such as high-deductible health plans coupled with a health savings account (HSA)—Phalen advised, “Remind employees how their HSA contributions will help cover costs for prescription drugs, then point them to price comparison sites like GoodRX.com to show them what they can expect to pay out-of-pocket for their medication—and where to find the best deals.”

“Enrollment levels in HSA plans are related to how employers view the plan,” said Beth Umland, director of research for consultancy Mercer’s health and business practice. “Investing in communications can make [a big difference] in driving enrollment to an HSA plan.”

“It seems that the longer a participant has had an HSA, the more we see signs of engagement, like contributing $2,000 or more annually to the account,” EBRI’s Fronstin said. “It takes participants some time to figure out how plans work.”

He noted that, “once the plan design is better understood, participants are more likely to take advantage” of an HSA’s many benefits. These include being able to contribute pretax dollars to the account and to build up or invest unspent funds to pay for future out-of-pocket health care expenses, creating an incentive to spend prudently today so that funds are still available down the road.

Published by HR Today here: https://www.shrm.org/ResourcesAndTools/hr-topics/benefits/Pages/millennials-bring-online-consumer-ism-to-health.aspx