From 3M Health Information Systems
Is value-based care really a “value” if patients can’t afford it?
Paying for value makes sense. It incents health care providers to maximize patient outcomes relative to price rather than the number of office visits, lab tests or medical procedures they deliver. But what if a positive outcome is too expensive for a patient to afford? Value is a relative term depending on the perspective of the payer. As patients pay a greater proportion or their total medical expense, value becomes an elusive concept.
The value equation is the outcome and patient experience divided by price. A hip replacement that costs $30,000 and results in no complications and a quick recovery for the patient is a better value than one offered at the same price but results in complications and a long recovery.
But what if an insured patient earns a personal income of $35,805 (U.S. median) and pays a family deductible of $3,722 (U.S. average) in a high deductible health plan. The annual deductible would represent more than 10 percent of their real income, not including co-insurance or other payments required after meeting the deductible. It isn’t difficult to see how 39 percent of Americans don’t have enough cash on hand to cover even $400 in emergency expenses, never mind a planned medical procedure.
Value-based care was not designed with the patient in mind. If it was, then patients would have the necessary information to select a physician and facility that could deliver the best outcome at the best price for their specific situation. Price transparency remains a challenge for non-emergent “shoppable” medical procedures, and impossible for emergency procedures that include hidden trauma activation and facility fees.
High deductible plans, copays, coinsurance and narrow networks mean that even insured patients find health care inaccessible, unaffordable or both, whether it’s value-based or not. A 2021 Census Bureau publication reports that 16 percent of fully insured households had medical debt. A 2021 Kaiser Family Foundation survey found that half of U.S. adults delay or skip medical care because of cost.
If value-based care is to become the primary way that Americans pay for health care, then patients must become stakeholders. All patients expect and deserve a positive outcome when obtaining health care services. The information asymmetry that exists between patient and doctor prevents a patient from truly knowing if they are getting quality care. However, they know with certainty whether they can afford the care after the bill arrives, but by then it is too late.
Patients need low cost options with up-front pricing for all medical services, which includes primary care, diagnostic tests and labs, elective procedures and emergency services. Until choosing a doctor is as easy as deciding between a $5 latte, a $2 regular coffee or a $0.10 cup of coffee made at home, patients will continue to select the most accessible option and then cross their fingers when the bill arrives and hope that they can afford it.
Steve Delaronde is senior manager of product, population and payment solutions at 3M Health Information Systems.