While employees’ wages have remained mostly stagnant, family insurance premiums for employer health plans have increased 20% since 2011. Furthermore, more than 50% of individuals have a plan with a deductible of $1,000 or higher per month, says Joan Budden, MPA, president and chief executive officer, Priority Health, a health insurer based in Grand Rapids, Michigan. Consequently, four in 10 insured adults say they struggle to afford their deductible.
Historically, the cost of health services has been hidden behind a cloak of secrecy. In some cases, people avoid getting necessary care because they don’t think they can afford it, Budden says. Other times, they pay more than necessary because they weren’t aware that lower cost options were available.
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The first step in helping consumers navigate the cost of care is to provide them with a basic understanding of what healthcare services actually cost.
“A lack of transparency is a huge problem that the healthcare industry needs to address,” Budden says. “Members deserve to have this information.”
Here are eight ways that health insurers can help patients navigate care.
1. Provide cost estimates
The healthcare industry sits on a mountain of data in electronic health records, but the industry has yet to fully tap into the data’s potential.
“Payers and providers can leverage technology to automate analysis of historical claims data and provide patients with cost estimates before treatment or the final bill,” says Matt Hawkins, MBA, CEO, and board member of Waystar, a company focused on simplifying and unifying healthcare payments. “Based on similar claims that have been approved or denied by a patient’s provider, predictive analytics can give the patient a confident estimate of what they will ultimately pay for a procedure.” Price estimation technology can empower a patient with information so they understand a procedure’s cost ahead of time, check insurance eligibility, and determine their ability to pay.
Priority Health provides members with easy-to-use, digital tools to help them understand their healthcare costs. In 2015 it launched the Cost Estimator tool with the goal of providing members with estimates of their out-of-pocket costs on services and procedures. The tool provides members with pricing that is specific to their own health plan and includes their deductible and copays.
“Our effort moves beyond the traditional approach of offering historical averages and instead focuses on information tailored to a specific individual,” Budden says. Priority Health pre-processes claims, providing an accurate estimate of the member’s cost for services they’re considering. The insurer has reported millions in shared healthcare savings as a result of the Cost Estimator.
2. Educate consumers
Health insurers can educate consumers on their coverage options and out-of-pocket costs in several ways. They can partner with employers to provide health benefits education at the start of employment or each year during benefits enrollment, says Mark Spinner, president and CEO, AccessOne, which provides patient financing solutions.
Such education can be provided virtually, telephonically, or in person in a large-group setting. Some payers work with employers to ensure employees gain points for participating in online education around health benefits. These points can be applied to the employee’s wellness incentive where wellness programs exist.
3. Simplify the user experience
To help consumers understand exactly what their benefits entail, human resource departments should revisit benefits-related documents, such as Summary Plan Descriptions (SPDs). SPDs present an opportunity to enhance and simplify benefits communications. While these documents are traditionally dense and difficult to understand, human resource departments can add charts, callout boxes, and icons to make documents more appealing and digestible. Some employers are beginning to convert their SPDs into digital, interactive documents that employees can access anywhere and anytime.