Buying health insurance is a lot like renting an apartment. Finding the perfect place is hard, and the price is always higher than you expect. But if it is conveniently close to your employer and there are few other affordable options, you sign the lease and agree to all of the terms. Only after a few monthly payments do you realize electricity, heat, water, and snow removal are not included. What was affordable now seems out of reach. And when you thought it couldn’t get worse, the landlord raises the rent to help pay for the unoccupied apartment across the hall or, even worse, to help subsidize the owner’s mansion.
That is exactly what buying health insurance has become. Paying into a system that doesn’t pay back. Premiums are skyrocketing at the same time, and reimbursements have gone down. Patients not only have to pay co-pays but also have high deductibles that they are never met. The excuse is always the rising cost of care in a shared risk model, but if you are paying for practically all of your health care out of pocket, who else is taking on risk but you?
When it comes to real estate, people strive to become homeowners. Paying a bank instead of a landlord means you own your home. It might cost you the same monthly, but you build equity because, in the end, you own property whose value will increase over time. Investing in your home is an investment in your economic future and a measure of upward mobility and prosperity.
Buying health care coverage should be more like buying a home. Patients should be able to build equity with every premium paid. If you are lucky to have good genetics and are able to avoid serious chronic illness while you are young, why can’t that be put away in the form of health savings for the future? Why can’t people own their health care like they own their health? I’d like to think Medicare was created with that in mind, an entitlement rewarded after years of work. A small deduction out of every paycheck that would someday help cover the medical expenses you anticipate would occur in old age was well worth it. But we pay much more, $5 to 10 per hour, of our wages to a benefit we never see, and that expires immediately if not paid. Much like paying rent, you must find a new plan or be left out in the cold when the lease is up.
For particular patients, chronic illness will require more utilization. Just like when the housing market is too expensive, it makes sense to rent, some patients always reach their deductible and derive the benefits of insurance. But for the vast majority, out-of-pocket maximums are rarely met, and even though premiums are set based on utilization, every encounter is counted, even if you paid it in full. Patients want it credited to their deductible, but it’s just another piece of data to justify a higher premium. It would be like paying to fix a dent in your car because it’s less than your deductible, then telling the insurance company about it so they can raise your rates. It’s a lose-lose, but what is the alternative?
Turns out, thanks to federal legislation on price transparency and health savings accounts, finding affordable medical care has become a lot easier. The direct primary care (DPC) model has proven time and time again, in nearly every instance, to improve the quality and efficiency of disease management at a lower cost. Removing the obstacles created by insurance, especially for routine or office-based encounters, has lowered the overhead and freed the physician to spend their time focusing on the patient rather than the billable encounter. The direct pay model is now available for specialty care, including outpatient surgery, imaging, ancillary services, and prescription drugs. Even at a hospital, paying directly is often less expensive than paying the balance of a price negotiated by insurance. Medical cost-sharing and self-funded plans have been the early adopters, but more and more employers are adding the DPO, direct pay option to their benefit packages.
Building individual health equity starts with a commitment to price transparency. The current system favors a broader, value-based model that does not require individual fees for services. Resources are allocated based on outcomes and are dependent on complex and expensive data acquisition. In a direct pay model, the physician is accountable only to the patient. It requires shared decision-making and informed consent from the patient, not permission from an insurer. Currently, two-thirds of the health care spend is allocated to collecting data and managing care; this can and should be returned to the patient to invest in the future of their own health. Insurance was intended to cover the unexpected and provide protection from exceptional medical bills; it no longer serves its purpose. We need a new plan that gives patients ownership of their health and control of their health care dollars.
Paula Muto is a vascular surgeon.
Image credit: Shutterstock.com
