Consumer Driven Healthcare

Healthcare Debit Cards…the Pay at The Pump of CDH

Brett Gens

As I recently used my Healthcare Debit Card at a Target store for some allergy medication I was struck by where we’ve come. I use a card to get Cash, I use a card to pump gas (more on this later), I use a card for Internet Shopping, and now I use a card to purchase medication and health care related services.

In the late 70’s and early 80’s, when ATM’s were new, was there ever a single person who didn’t think, “Why didn’t we have these devices a long tome ago?” Fast forward to the 90’s when Pay at the Pump was becoming increasingly popular.  Personally this saves me about 20 minutes a week (plus $$ in spur of the moment purchases but that’s a different topic), money saved not writing checks, or ATM fees, since the convenience stores I frequent are NEVER in my banks’ network. Roughly 50% of people Pay at the Pump and the other half walk inside to pay.  I see many of these folks buying only gas: no energy drinks, cigarettes, coffee, etc.

I see this analogy similar to a debit card claim versus a paper reimbursement claim.  Why anyone would bother with the hassle of using a “normal” credit card, cash, or a check for a valid medical expense is beyond me. Filing a manual paper claim for something I could have used a Medical Debit Card for is probably number 4 or 5 on my list of 100 things I’d rather not be doing at any time…ever.

With the advent of IIAS (Point of Sale Substantiation) in 2007 (by the end of 2008, most chain pharmacies must have an IIAS as well), there’s really no valid reason to NOT have a Healthcare Debit Card for Consumer Directed Healthcare Plans. Some Industry stats indicate that there are about four million to five million HSAs and four million to six million active HRA accounts, and around 20 million FSAs. With the pending HSA explosion Healthcare Debit Cards will be like cell phones…you won’t find many who DON’T have one…well except my grandparents.

With skyrocketing health care costs, a CDH Debit Card has to be one of the easiest ways for an Administrator to save costs:  money saved in labor, printing checks, postage, etc.  Checks are roughly $1.00 each; direct deposit 9-12 cents each. A Debit Card Swipe costs nothing.

I love my Healthcare Benefits Provider.  They are always very prompt and helpful I enjoy talking to them when the need arises.  However, I figure they have many better things to do then substantiate, adjudicate, file and process my claim, generate a letter or two, and send me a check… all for my $6.59 purchase of Aleve.

Brett Gens (bgens@lighthouse1.com) is a Debit Card expert and Business Analyst at Lighthouse1

The Information Gap

  We really do have a long way to close the information gap in healthcare.  I was struck the other day by all the discussions around gas prices and the energy (ba dum pum) a group of friends were putting into finding the best price for a gallon of gas.  They new the cost to the penny, where to buy it, and how to find out when it changed.

Contrast that with our perceptions and lack of real knowledge about the cost of healthcare.  Those of you that are healthy probably calculate the cost by what gets deducted from your check every month for insurance premiums.  Others believe the cost of healthcare is reflected by a prescription paid for on a regular basis.  Neither of these ultimately comes close.

Most consumers have no idea.  TriZetto's recent Cross-Constituent Survey found that while most consumers were concerned about the cost of healthcare, nearly two-thirds admitted that they didn't know what it cost them.  I am pretty sure that if I asked 10 adults in my neighborhood what the price of gas was, all of them could get within 10%.

How much does my family's healthcare cost in one year?  Go ahead and guess. 

Then consider...

• The health plan premiums deducted from your payroll.  Despite the fact that this is written right on your payroll stub I bet you don't know it by heart.
• The health plan premiums paid by your employer.  Only 1 in 10 knew that this was annually higher than $1,000 individual / $5,000 family - in actuality this is $3,600 individual/$7,400-$9,400 family (Kaiser)  While there's plenty of talk about provider transparency, the fact that most people will never know the true cost of their insurance unless they go on COBRA ("$1,300 a month?!") is actually the fault of employers.
• Don't forget your Medicare insurance.  While this is probably just a tax you'll never benefit from, its intention is to presumably fund your future healthcare needs.
• The actual cost of care and your responsibility for that care (copays, deductibles, co-insurance).
• Prevention and wellness programs (healthclub memberships, weightloss programs, etc.)

Another intersting finding from the survey was that while provider accounts receivables were climbing rapidly and healthcare costs are supposedly on everyone's mind, 68 percent of providers said infrequently or never esimated the amounts patience owed prior to providing care.

Picture this in your mind this the next time you fill up your tank:  Many consumers are pulling into the gas station not knowing the price or how big their gas tank is, and they won't know how much it costs until after they've filed the tank.  (Oh, and you won't get your bill for a few weeks.)

Until the right incentives are in place for payers, providers, and employer benefit managers, much more data and access to data is needed before consumers are going to "get it".

Healthcare Transparancy: Not Just a Provider/Payer Problem

Anyone in the CDH space will tell you that one of the key requirements to engage consumers is provider price and quality transparency.  In order to tap into the awesome power of the American consumer (uneducated and misplaced as it may be), information and tools are needed.

But there are plenty of other mechanisms in place in need of "transparency".  Over half of U.S. citizens are in health insurance plans provided through their employer.  This is an invention of the mid-20th century to create bargaining power, originally with providers and provider groups, evolving to insurers, and ultimately to HMOs and managed care organizations. 

Like taxes, there are some efficencies that come from health plans working with employers and collecting premiums through payroll.  But also like taxes, consumers have in many cases become "numb" and are less aware of just how much they are paying. 

When I was self-employed and paid quarterly estimated taxes, I always said, "If everyone had to write out a check each quarter (or their healthplan premiums each month), there would be many more fiscal conservatives in the world."

By focusing exclusively on the cost of provider services (and less so on the cost of insurance benefits which are often shared between employer and employee but with less visibility to the overall cost), the consumer doesn't get the whole picture. 

Is it time to sunset employer-sponsored health plans?

Six Things Healthcare Consumers Need

In order to put the Consumer in Consumer Driven Healthcare, we need to lay some cement down so we understand each other when it comes time to actually get into what a consumer needs or wants (or must be force-fed) to get the benefits many believe can be achieved. 

There are a number of ways to look at this, but here's one:

1. Benefit Plan Choices and Decisions.  A consumer seeks out or is offered one or more benefit options, often designed by an employer or their representative, and must evaluate their own health and financial situation in order to make the best choice.
2. Benefits and Account Management.  Although in the end each consumer really just wants to know how much they will have to pay for, in order to do that they need information about coverage, deductibles, provider networks, formularies, spending account balances, forecasts, tax advantages, and upcoming health care expenses.  This really is rocket science. 
3. Health Management.  There are real opportunities in this area to use incentives and empower the consumer to better manage their own health.  From your New Year's resolution to ease up on the partying in 2008 to the corporate-sponsored weight loss program, ultimately we all need to take more responsibility for our individual health.
4. Care Choices.  The fact is that while consumers may feel like they want to have the ability to make choices and that alone should be a reason for it, the reality is that the system requires it in order to create competition and drive prices downward.  The days of being referred through the HMO system like sheep are over.
5. Diagnosis and Treatment.  This is certainly the most relevant part of healthcare, especially for a consumer, and includes every part of the products and services we all use and pay for to figure out what is ailing us and then fix it.  This category includes clinical and ambulatory care, chronic disease management, alternative medicine, prescription and over-the-counter drugs, information resources, and other products and services to keep us all well.
6. Care and Spending History.  In order to make the best decisions a consumer needs to know what care they have gotten and how much it has cost them.  As health and wealth converge these can become blurry, and there are some exceptional services and tools to help, but knowing your own health history as well as managing your money or benefits is your responsibility.

Over time I will dive into each of these subjects much deeper, but my hope here is to capture the universe that the consumer lives in with both simplicity and completeness.