Medical Tuesday Blog
Having No-Copay and Non-deductible health insurance
When I went into practice I immediately noted that patients with total coverage with no deductible and no co-payments had a rather large appetite for laboratory tests, x-rays, and procedures. They also were more indulgent in obtaining sick benefits and disability benefits. I also noted that I was asked to write many excuses from work when I felt they really could work.
I also found that these patients made more frequent office visits and asked for more medications. There never seemed to be restraints on any treatment plan. They would see ads on TV for a new drug and would request justification for the latest medication which may be ten times more expensive than older generics. The medical rationale was frequently rather thin and pharmacies began to note which doctors were easy marks.
In regards to laboratory work, patients that were told the standard of care required repeat lipids every 5 years if the baseline was normal. However, since in most cases there was no copay, many patients would request the full panel every year. Several even suggested regardless of my attempts to persuade them otherwise, that they would find another physician if I didn’t order the tests annually.
A scientific study would be difficult to design for these matters. So we did a “what if” evaluation “What if” you had to pay 30% of the cost of these extra items you feel you need; would you pay that 30%? People that requested hospitalization when it would not be needed, “What If” you had to pay 10% of the cost of the hospitalization, would you still insist on being hospitalized? At time of discharge, if you requested to stay a day or two longer, “what if” you had to pay 10% of these extra two days, would you still insist on staying? Frequently the response would be “I think my wife could help me home and I don’t need a nurse.”
We have seen orthopedic patients post fracture that were deemed ready for discharge on Dec 22 and the family would insist on the patient be kept over the holidays since they were expecting guests for Christmas. When they were told they would have to pay for those extra days, they began to realize that they were asking their insurance company for several thousands of dollars for minimal care giving.
However, as we have studied in our companion venture in HealthPlanUSA, our business plan utilized a deductible equal to the average maintenance cost of health care for each decade of life. As a working estimated, we thought a $300 deductible in the third decade of life, a $400 deductible in the fourth decade of life, a $500 deductible in the fifth decade of life, a $600 deductible in the sixth decade of life, a $700 deductible in the seventh decade of life with onset of social security benefits now that life expectancy nearly 80 years of age (FDR chose age 65 when life expectancy was 62) to 72 and indexed to actuary charts of life expectancy. The basic usual health care costs of blood counts, urinalysis, kidney, liver and lipid checks are not considered insurable items by actuaries. These basic costs would be expanded in each decade of life as an ECG or X-ray may occasionally be required.
Our business venture plan used a 10% copay on Hospital care, a 20% copay on ER and urgent care, a 30% copay on outpatient physician, lab, and x-rays, and a 40% copay on durable medical equipment which frequent cover duplicatable items. For instance, motorized wheel chairs are now used for travel to grocery stores, barber shops, salons, and other neighborhood shopping replacing the second car in most families. A hospital bed in many instances would not fit into the average home without the prior bed being sold saving household furniture costs. This HPUSA plan would markedly reduce the health care costs in our country.
Using our “what if” data, we felt the healthcare costs in our country would be trimmed by 30% to 40% by a plan deductible equal to the average cost of baseline yearly care (also known as high deductible health insurance) and a co-pay on every charge. Our rough data revealed that motorized wheel chairs are now so prevalent in our country that we are witnessing wheel chair accidents. There was such an accident a block from my office. Both parties got on their feet, up-righted their heavy wheel chairs, and proceeded down the sidewalks in opposite directions. Since both parties appeared to be ambulatory, the medical need could be questions. It would be the first recognition that the motorized wheel chair is not entirely a healthcare cost but is also a transportation cost which also is not an insurable item. No health insurance can survive if the cost of transportation or home furnishings are included.
Thus it became apparent that a deductible plus a copay on every item or hospital day would severely reduce health care costs. Thus insurance companies that advertise non-deductible and no copay insurance, are not cost effective. Although, we felt this would cut health care costs by 30% to 50%, it was apparent that the hospital lobby or the insurance lobby didn’t believe this or felt it was unhealthy for their bottom line.
Medical Gluttony thrives in Government and Health Insurance Programs.
It Disappears with Appropriate Deductibles and Co-payments on Every Service.