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Employee Cost-Sharing

By February 11, 2015Commentary

The Health Care Cost Institute was formed to collect information from large private health plans and analyze that data to help identify trends and issues.  Because it is a multi-payer database it contains a far larger and more representative data pool.  The most recent brief from the Institute looks at patient cost-sharing.  For this brief the data is all from employer-sponsored insurance plans.  (HCCI Brief)   In these plans, several trends are colliding.  One is the growth in patient grow-sharing; higher deductibles, higher copays, more use of coinsurance.  Another is a recognition that there is significant price variation even within the local health markets where these enrollees receive care and that price variation appears unrelated to quality.  And while there is a lot of talk about price transparency, it remains difficult for most consumers to find and understand information about what they will pay for a specific service from a specific provider.  The issue is gaining in urgency, for example, the out-of-pocket spending by employer-sponsored plan enrollees rose from $662 per capita in 2012 to $707 in 2013, or 7%.  This is obviously well above income growth and the per capita average masks substantial variation–a lot of people have no or little spending, but a minority have much larger spending.  Looking at five common health services, including a physician visit, a colonoscopy, cataract removal, MRI and obstetric ultrasound, the analysis found large variation, which follows through to variation in the out-of-pocket cost.  For example, the national price variation for cataract removal was $2,242 in actual paid amounts.  The typical patient share was 20%, so the difference in out-of-pocket cost to the consumer could be as much as $444.  Even for the office visit, the patient could pay as much $19 more.  This variation analysis emphasizes the need to find some way to get consumers useful, real-time, specific data on what they are going to pay for a service.

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