Case Study: Breaking Down Barriers
Employer & Advisor MaterialsCase Study
Breaking Down Barriers
The Access Epidemic in Employer Sponsored Health Plans
We looked at 7,667,614 episodes of care to see what kind of financial barriers employees and their families face
Across a total spend of $6.1 billion employees picked up 19.2% of the cost or about $1.1 billion.
And a lot of this was just due to price failure.
Definition
Price Failure: A situation where the price of a good or service deviates significantly from its fair or expected value, often leading to inefficiencies in the market.
Example #1
A $8,596 MRI of the Brain where the plan paid $7,450 and the employee paid $1,146.
This should have only cost $699 or about half what the employee paid. So the employee needlessly paid over $1,000 and the employer overpaid by $6,751
Example #2
A $60,589 Knee Replacement where the plan paid $57,244 and the employee paid $3,345.
This should have only cost $19,000 - so the employee needlessly paid over $3,000 and the employer overpaid by $38,244
We keep hearing that when employees have “skin in the game” they become better shoppers but we didn’t see much if any of that in the nearly 8,000,000 instances we looked at
Health Affairs: HDHPs did not significantly increase price shopping but reduced overall spending by decreasing utilization.
National Bureau of Economic Research: Patients with HDHPs reduced healthcare spending primarily by cutting back on care, not by seeking lower prices.
Journal of General Internal Medicine: HDHPs were associated with decreased use of preventive services and worse health outcomes.
So “skin in the game” will encourage people to avoid care but it won’t make them good shoppers
The high cost of healthcare is a big burden on U.S. families, and that health care costs factor into decisions about seeking care. These costs and the prospect of unexpected medical bills also rank as the top financial worries for adults and their families.
One in four U.S. adults say they or a family member in their household had problems paying for health care in the past 12 months
About four in ten adults (41%) report having debt due to medical including debts owed to credit cards, collections agencies, family and friends, and banks
About half of adults would be unable to pay for an unexpected $500 medical bill in full
When employees avoid medical care due to cost, it can lead to significant negative consequences for their health and their financial well-being.
|
Worsening Health Outcomes: Delaying or skipping necessary medical treatment can result in the worsening of health conditions. Many employees who skip care report that their health issues have deteriorated as a result and 55% of people with employer-based plans said a health condition worsened because they delayed or skipped care due to cost. https://westhealth.org/news/more-americans-skipping-medical-care-due-to-cost-survey-says/ |
Increased Medical Debt: Avoiding care often leads to increased medical debt when employees eventually seek treatment for more severe conditions. Many Americans report incurring medical debt, which can be a significant financial burden. This debt often forces individuals to cut back on essential expenses like food and housing. https://www.americashealthrankings.org/explore/measures/costburden |
|
Higher Mortality Risk: The financial burden of healthcare can have severe consequences, including increased mortality risk. Some reports indicate that delayed care has led to death for some individuals who could not afford the necessary treatment. https://westhealth.org/news/more-americans-skipping-medical-care-due-to-cost-survey-says/ |
Mental Health Impact: Skipping care due to cost can also lead to anxiety and stress. A significant number of people with medical debt report feeling anxious or worried about their debt, which can further exacerbate health problems. https://www.commonwealthfund.org/publications/surveys/2023/oct/paying-for-it-costs-debt-americans-sicker-poorer-2023-affordability-survey |
|
Disproportionate Impact on Vulnerable Groups: The impact of healthcare costs is particularly severe among vulnerable populations, such as those with low incomes and those in poor health. These group of people are more likely to skip or delay care due to cost, leading to greater health disparities. https://www.kff.org/health-costs/issue-brief americans-challenges-with-health-care-costs/ |
And remember we looked at claims paid by employers and employees that totaled over $6.1 billion.
And many employees still don’t love their health plan
The average Net Promoter Score (NPS) for health insurance in 2023 was reported to be around 27.
Companies like USAA and Starbucks, known for their exceptional service, have NPS scores of 75 and 77, respectively. In contrast, the insurance industry's average remains lower, underlining the gap in service quality and customer experience within health insurance plans
https://customergauge.com/benchmarks/blog/nps-insurance-industry-net-promoter-scoresBut how do you remove barriers to care and deliver benefits employees love?
Plan Design:
People should not be paying deductibles or copays if they are going to the right place.
There should be a $0 out-of-pocket benefit for things people can schedule.
This allows you to do 2 things:
- incentivize employees and their employees to choose the right provider
- remove the financial barriers to care people need
Concierge Support:
Concierge support can significantly enhance the employee experience by providing personalized, high-touch services that simplify access to care and this is exactly what we do.
Employees benefit from reduced hassles and increased satisfaction. By addressing individual employee needs more effectively, concierge support can help employees make better healthcare decisions, ultimately contributing to better health outcomes and lower overall healthcare costs for both employees and employers.
Thanks!
And if you loved this case study and want more case studies or just want to chat with a human, let us know your email.
Get This For Free
Fill out this form to access this free resource.