BenefitsAll

Good Health Plan Design Can Counter Overtesting, Overtreatment and Overspending

January 19, 2016

We know that the unsubstantiated charges for physician and hospital care are the main drivers of out-of-control health care costs. We also know that health care affordability cannot happen until we restrict what we pay these two groups. Pharmaceutical and health insurance company prices are also out of control, but they never really claimed to have care-focused business models. Meanwhile, there is an assumption that doctors and hospitals have our best interests at heart and are not trying to harm us. Our bodies or our bank accounts… However, that sentiment is hard to support when you read reports of bills for $15 per Tylenol tablet and $23 per alcohol swab.

So how can we reduce doctor and hospital charges since neither of these groups is willingly going to take a pay cut? We do have a few options:

  • Force these groups to reduce their prices via government regulation
  • Ask them to be more price-sensitive when dispensing medical treatment
  • Design health plans that discourage over-testing, over-treatment and, therefore, over-spending
My feeling is that American doctors would strike (withhold their services) at the hint of government regulation of their pay. And, by design, we do not have enough doctors who would put their patients’ welfare above their pay concerns. Enough said.

Asking doctors to consider the cost of care at the diagnosis and treatment stage is not asking too much. Ideally, no one should have to ask doctors to consider their patients’ pocketbooks when prescribing care; it should be automatic. If less expensive treatment options exist, doctors should always give patients an option. The same goes for testing: if it is not absolutely medically necessary, doctors should let patients know more testing won’t help with a diagnosis or improve their condition.

The unfortunate and unacceptable reality is that many doctors and hospitals don’t do this. They over-tests and over-treat on a daily basis. All that over doing it adds up to a ton of money spent on worthless “medical care.” Still doctors have a lot of excuses for providing unnecessary care.

  • Don’t know the cost of care
  • Don’t have time to discuss cost with patients
  • Afraid of offending patients if they talk about cost
  • Afraid of being sued by patients
  • Want to concentrate on treatment, not cost
  • Feel pressure from patients to provide unnecessary treatment
  • It’s big pharma and health insurers who drive up health care costs
We can’t lower health care costs if doctors hide behind excuses, blame others or refuse to acknowledge the huge role they plan in inflating health care costs. Specifically, the over-testing and over-treatment that they alone perpetuate is a big reason that health care costs are so out of control.

So knowing that we cannot count on doctors and hospitals to police their own financially self-serving behavior, we need to create options for patients that don’t want to be part of this scam. One option is to allow health insurers to design and offer plans that limit a doctor or hospital’s ability to over-tests and over-treat. Plan designs such as narrow networks, reference pricing and use of bundled payments (centers of excellence) by insurers or employers have the potential to reduce unnecessary care. Insurers, led by the expertise of their medical review staff, can decide what tests and treatments have value and those that do not.

I know, restricting access to unnecessary care has been tried before and it didn’t work. Patients and doctors fought insurers to regain access to unlimited tests and treatment or, whatever the doctor prescribes. But things are different now.

  • One, we have a national health care reform law that can be amended to provide insurers protection against lawsuits for denying access to unnecessary care. If people know in advance that the plan won’t pay for unnecessary care in exchange for lower premiums and other out-of-pocket costs, they forfeit the right to sue (within reason)
  • Two, we all feel the sting of increasing health care costs or know someone who is
  • Three, high-deductible health plans are seen as nothing more than catastrophic coverage, useless in all but the direst of circumstances
  • Four, there is a growing consumer attitude for more control over what we pay for our health care
Doctors and hospitals will, of course, fight any effort to limit access to unnecessary care. They will continue to scare patients with diagnoses of minor issues and convince them that more tests and more expensive treatment is better than less testing and less or no treatment. And so be it. But let the people that label even legitimate oversight and reasonable medical care restrictions as death panels pay for unrestricted medical care. And let those of us who recognize that not all prescribed medical tests and care is necessary, pay for just the care we need.

Doctors and hospitals will always tell us that you cannot put a price on you health. But they do it. Every test they order and every course of treatment they provide comes with a price. And the more tests and treatment they provide, the more money they take in. To counter the incentive for doctors to over-tests and over-treat, we need health plans that have design features that reduce or eliminate unnecessary medical care.


Resources:
  • http://www.rd.com/health/wellness/wildly-overinflated-hospital-costs/
  • http://www.healthnewsreview.org/2015/02/stop-blaming-demanding-patients/
  • http://www.businessinsider.com/why-doctors-overtest-2014-5
  • http://blogs.scientificamerican.com/cross-check/how-can-we-curb-the-medical-testing-epidemic/
  • https://www.advisory.com/Research/Health-Care-Advisory-Board/Resources/2013/Commercial-Bundled-Payment-Tracker
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