Tag Archives: michael levin

Are Patients Ready to Take Control?

In 1980, the actor Steve McQueen traveled to Mexico to receive unorthodox (and ultimately futile) cancer treatment. The widespread coverage that McQueen’s trip received in the mainstream press can, of course, be attributed to his celebrity. But it was also because the actor had taken the reins of his healthcare from the medical establishment, something that was seen as brazen.

Back in those days, we wouldn’t have used the term “consumerization of healthcare” to describe what McQueen did. However, his approach has become an accelerating trend over the past decade, when Americans have taken more control over their health, and the healthcare experience. Consumers are more informed about choice, more demanding about the services being offered and more focused on how they pay for it.

The list of changes is long and growing, focusing on:

  • Wellness
  • Easily accessible online repositories of medical information and advice
  • Medical tourism
  • Physician ratings
  • Walk-in clinics at stores like Walmart and CVS
  • Health spending accounts
  • A proliferation of insurance options

As technology advanced, consumerization was enabled, and, as healthcare costs increase, it’s grown in importance. But the question remains: Do consumers have what it takes to control their health and healthcare as they both consume it and pay for it?

See also: Healthcare Buyers Need Clearer Choices  

What’s driving the consumerization of healthcare?

Thanks to the wealth of information available on the internet (product and service details, pricing info, ratings and reviews), consumers have more control over what they spend their money on, and where and how they spend it. Consumerization began with product shopping but quickly moved into the service sector (financial services, travel services, healthcare).

Whether consumers are covered by group plans in their workplace or by individual plans, they are paying more for their coverage and experiencing higher out-of-pocket costs. A recent Kaiser Foundation study showed that, from 2015 to 2016, deductibles increased by 12% for those covered by employer-sponsored plans. While deductibles have grown more rapidly than premiums – this is, after all, the tradeoff – premiums have still been rising more rapidly than wages. More now than ever, people are more conscious of what they’re spending.

Consumers have become more active

Today, consumers are increasingly relying on technology to manage their health. This trend cuts across generations. Baby boomers were perhaps the first truly “health conscious” cohort. Running, as a popular activity, took off on their watch, as did an interest in (and willingness to spend on) healthier foods. At the same time, boomers are focusing on the health and the healthcare experience of their elderly parents. Boomers are taking advantage of monitoring technology that enables them to keep a remote eye on their parents while helping them remain independent. Then, of course, there’s tremendous interest coming from millennials — digital natives who are used to ubiquitous technology and to shopping around and finding the best deals in all aspects of their lives. Millennials are more likely than boomers and Generation X-ers to own a fitness tracker, search for a physician online and base physician choice on reviews. Millennials are also more likely than other generations to go online and research a medical problem before consulting a physician. Technology, in fact, is bringing about a merger between health and healthcare. When employers are buying Fitbits and sponsoring wellness programs for their workforce, they’re hoping to achieve the dual benefits of healthier employees and more cost-effective healthcare.

There is a growing body of evidence that consumers want more active involvement in their healthcare, and the adoption of digital health tools and applications is a good proxy. For the past several years, Rock Health has surveyed consumers on their use of digital health. In a 2016 report, Rock Health found that 46% of those surveyed have adopted three or more forms of digital health tools. They’re using a fitness tracker, engaging in some form of telemedicine or contacting their physician via email or text message. The survey also found that the majority of Americans would like an electronic version of their healthcare record, and that, in the six months prior to the survey, 20% had requested or downloaded a copy.

Do consumers have the tools and knowledge to manage cost?

Consumers are showing an increasing willingness to take control on the payment end of things. But they may not yet be in a position to do so. Policy Genius, which offers online tools for buying all types of insurance, surveyed consumers on their understanding of some of the basic concepts underlying health insurance. Only 53% picked the right definition of “co-pay.” The term “coinsurance” was understood by just 22%. Roughly half couldn’t define “deductible.” So, while consumers may express a greater desire to take control of their healthcare, they may lack awareness and understanding of how to best utilize their insurance to pay for it.

See also: Consumer-Friendly Healthcare Model  

There’s an app for that

The good news is that technology applications are making consumer control possible. We’ve already seen plenty of apps that help manage so many aspects of health and the healthcare experience: apps for checking symptoms, chatting with a physician, monitoring medications, tracking vitals and even accessing healthcare records. Applications that focus on the cost and payment side of the equation have been slightly slower in arriving to market, but they are coming.
There is an emerging array of insurance-related (insurtech) apps that are making it possible for consumers to gain control of their insurance buying experience, apps that enable them to figure out whether their physicians are part of their network, whether their prescriptions are covered and just what that coinsurance-copay-deductible means to their pocketbook. These insurtech platforms include businesses like GetInsured, which helps individuals purchase the right health insurance plan; apps like Stroll Health, which brings transparency and efficiency to the imaging referral process by delivering personal recommendations based on what is covered by the patient’s insurance plan; and GlucosePath, an app that looks at the 6 million combinations of drugs available to treat Type 2 diabetes to find the regimen that is affordable (based on the patient’s insurance), effective and has the fewest side effects.

Given that Steve McQueen was famous and wealthy, he probably wasn’t worried about the cost or payment side of his treatment. But taking control of his own healthcare the way he did may have helped spark a major consumer trend. Today, consumers continue to push for active control in their health and in how they consume and pay for their healthcare. And, through technology, the healthcare industry is inexorably delivering solutions to fill any gaps that keep consumers from exercising even more control.

Healthcare Buyers Need Clearer Choices

Over the past decade, many industries have made tremendous progress when it comes to offering consumer choice. Just look at the travel industry. Twenty years ago, it wasn’t possible to search for a flight, compare dozens of different options side-by-side and tailor your selection to match your specific needs. Shopping experiences across many categories are now offering choices — and making those choices clear. The healthcare industry, however, is lagging behind. And when it comes to something as critical as healthcare, clear choices are imperative. Consumers who make a less-than-optimum insurance choice face higher costs, less satisfaction and poorer health when an issue that should be looked after gets ignored because it’s not covered.

These Six Factors Make Clear Choices Imperative for Health Insurance Shoppers

1. Cost

When most individuals shop for a new plan, it’s not just a matter of going with the option that comes with the lowest monthly premium. There’s always a juggling act between the monthly premium and out-of-pocket costs. If the co-pays and deductibles are too high, if there are services that individuals use that aren’t covered, the lowest-cost plan may well end up costing the consumer more. Consumers need to understand their total cost of healthcare with any given plan.

See also: Key Misconceptions on Health Insurance  

2. What’s Covered

After the basics, individuals may have a wide range of services for which they seek coverage, and every healthcare consumer will have different needs. One individual may require mental health services, another physical therapy. For yet another, it’s audiology services. Even if a certain service is covered at some level, there will likely be different limits (e.g., the number of physical therapy sessions allowed) from one plan to the next. While it’s not possible for individuals to anticipate everything that they might need in a year, consumers should be experts in their current requirements.

3. Prescription Drug Coverage

Formularies listing the prescription drugs covered under each insurance plan can be extensive. And when they’re on paper, they can be very difficult to navigate. However, consumers are quickly learning the importance of determining whether the drugs they take are covered by their health insurance plans. Given last year’s unexpected cost increases for the EpiPen, consumers are wising up. Looking through the formulary and not finding an expensive drug they need to take regularly may knock a plan out of consideration.

4. Provider Network

Whether a healthcare provider is in-network is a big deal to consumers. In fact, when it comes to choosing a physician, it may be the biggest deal. A 2015 survey of more than a thousand patients showed that 90% of consumers reported that the most important attribute of a physician is whether they accept the individual’s health insurance – more important even than the physician’s clinical experience. Consumers need to know what happens when they see a physician or other provider, or use a hospital, that’s outside of their network: The costs may be untenable. Consumers might be okay with switching from a primary care physician to someone new if they only see them once a year for a regular physical. But if they’ve developed a close relationship with their pediatrician – someone they like and trust – they’ll want to make sure that their provider is in-network.

5. Unique Elements

Consumers are taking more ownership of their own healthcare. These days, when shopping for health insurance, they are now factoring in all of the details that make them unique. For example, if their kids play sports, they’re thinking about ER visits. When they’re planning an addition to the family, they’re doing research to see if the facility where they want to have their baby is covered by their health plan. There are many unique elements that require choice. Health insurance is not a one-size fits all solution.

6. Overall Risk Aversion

When it comes to choosing a health insurance plan, risk aversion is really about what level of financial risk an individual is able to accept. And, in this regard, every individual is different. The lower-cost premium plan might be fine if there’s a low probability of something occurring that is not covered. But if you’re likely to be making frequent ER trips with your kids, that low-premium plan may not be so attractive. It’s up to the individual to determine how risk-averse they are.

Insurance customers are desperate for clear choices that are easy to understand. They need them because everyone is unique and living a different situation. And, given the wide range of choices that are available to consumers in so many other aspects of their lives, they expect options. Choices provide an opportunity for your customers to find the best-fitting health insurance plan. Are you offering enough choices?

See also: The Basic Problem for Health Insurance  

Clearly presenting the information that today’s healthcare consumers require can be overwhelming. After all, carriers are experts in insurance, not in software application development and data presentation. Fortunately, in the 21st century, data is highly digestible, usable and transparent. Health insurtech companies across the nation are making sure of that. As insurance carriers and health insurtech companies work together, slowly but surely, the industry will progress, offering more clearly defined choices for today’s consumers.

How to Pick a Health Plan (Carefully)

Total drug spending is expected to hit $535 billion in the U.S. in 2018, which is almost 17% of all personal healthcare spending, according to The Wall Street Journal. In the aggregate, that’s an awful lot of money on the table. But most of us don’t live in the aggregate. The prescription drug spending we care about as individuals is what’s being talked about around our kitchen tables — especially for the millions of Americans choosing a health plan during this open enrollment period.

For those of us in this group, understanding whether and how our prescription drugs are covered, and how each element of the healthcare (and insurance) mix will contribute to our total cost of healthcare, is crucial. Selecting the wrong plan can be costly. Very costly.

Health plans — also complicated

When we think about our personal healthcare expenditures, we tend to focus on out-of-pocket spending, i.e., what comes out of our wallet beyond what we pay for our monthly premiums. Understanding how much an individual will pay out-of-pocket for a prescription drug completely depends on the benefit design of the health plan. Premiums, co-pays, deductibles, co-insurance and other health expenses all play a contributing role. So where does one start, to figure out which plan to choose, based on the drugs they take?

See also: 5 Apps That May Transform Healthcare  

Formularies are a starting point

A formulary is the list of drugs attached to a specific health plan that shows whether a drug is covered by that plan, and what tier level the drug falls into. Formularies can vary greatly. Certain drugs will be covered by a health plan’s formulary; others will not. The same drug might be covered at different tier levels for different health plans. All of this funnels into what an individual will pay for a prescription drug. If an individual takes a drug on a regular basis, it’s crucial to check the formulary connected to all health plans being considered during this open enrollment. You do not want to show up at the pharmacy, prescription in hand, and find that your drug is not covered and that you’re completely on the hook for it. Doing the extra research now can save thousands of dollars over a year.

A lesson from Crestor

To better understand how out-of-pocket costs for prescription drugs can vary, let’s walk through a real-life example: Crestor, which, with 21.4 million prescriptions written for it per month, is a popular branded drug that helps patients with high cholesterol. Data scientists at Vericred, a healthcare data services company, reviewed multiple health plans in the state of New York for individuals under the age of 65 in 2016 to see specifically what the cost range was for Crestor. Below are results for four different examples of plans that cover this drug. GoodRx estimates the cost for a 30-day supply of 20mg Crestor to be $324.

New York Platinum Plan
Plan details: $0 deductible, $30 co-pay for a monthly supply
Total cost for Crestor for the year on this plan is $360.
Total healthcare cost, including monthly premium of $740, is $9,240

New York Gold Plan
Plan details: $750 deductible, $35 co-pay (deductible not required for drug co-pay)
Total cost for Crestor for the year on this plan is $420.
Total healthcare cost, including monthly premium of $605, is $9,420

New York Silver Plan
Plan details: $2,250 deductible, $45 co-pay (co-pay applied once deductible is met)
Total cost for Crestor for the year on this plan is $2,448.
Total healthcare cost, including monthly premium of $473, is $8,136

New York Bronze Plan
Plan details: $4,000 deductible, $35 co-pay (co-pay applied once deductible is met)
Total cost for Crestor for the year on this plan is $3,888.
Total healthcare cost, including monthly premium of $414, is $8,864

An individual in New York using Crestor can pay anywhere from $360 a year out-of-pocket to $3,888 a year out-of-pocket for the exact same drug. That’s a range of more than $3,500 depending on the health plan the individual selects.

However, the drug cost isn’t the only consideration. If you look at the amount spent on Crestor alone, you might be inclined to select the Platinum plan with $0 deductible and a total expenditure of $360 for the year on Crestor. However, if you add in the monthly premium, and look at the full picture, it becomes apparent that the Silver plan is the best choice in this example. Even though the amount spent on Crestor is $2,448 (vs $360 on the Platinum plan), the total amount spent on healthcare for the year is $1,100 less than that of the Platinum plan.

The example may be simple, but the issue is complex

As noted above, this example is simplified. Oversimplified. In real life, the issue is more complex. There may be additional prescription drugs to consider and other out-of-pocket costs for co-pays and deductibles. Someone with that high-deductible plan may have an accident on New Year’s Day that takes care of their deductible for the year. Then spending on Crestor becomes nothing more than the monthly co-pay.

But this example, as oversimplified as it may be, demonstrates the massive gap in spending for prescription drugs that exists among different health plans. It also demonstrates how important it is to find a plan that fits an individual’s needs. As an individual’s circumstances change, so does the math. The more conditions that need to be treated, the more office visits will be required and the more drugs will need to be taken. Every element affects the deductible and co-pay, which in the end affect the total amount spent on healthcare.

See also: Not Your Mama’s Recipe for Healthcare  

When it comes to picking a health plan, prescription drugs make the choice more complicated, and there’s no one simple solution. But new technology is helping to uncomplicate matters.

While the healthcare industry still has a way to go before purchasing a health plan is as easy and straightforward as booking a trip on Expedia, transparency and technology are giving today’s consumers the opportunity to more easily weigh healthcare and cost decisions. Many decision support tools and health tech companies are just getting started. But, there are options out there to help individuals understand and act on their choices. GetInsured, Policy Genius and Take Command Health are excellent platforms, providing tools that help consumers find health plans that fit them uniquely. Some of these platforms even include different ways to search by doctors, prescriptions and conditions that need to be covered. The technology is only getting better – and better consumer decisions on healthcare plans are sure to follow. Consumers will have the opportunity to make truly informed choices – choices that can end up saving them thousands of dollars.

Prescription drugs will remain a major part of the healthcare spending mix for the foreseeable future. What individuals need to focus on is how drug costs affect their personal bottom line. Emerging technology will help them do just that.