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HURST: There are two key drivers of the cost of health insurance. One is the cost of care. That rises in Utah an average, on the low end, of 6 to 12 percent any given year. So the cost of care continues to outpace inflation. There are a variety of reasons why that takes place, but that is a key driver of why health insurance increases every year.
The second piece is utilization. As Americans, we consumed 50 percent more healthcare in the last seven years than we consumed the seven years prior. As we consume more and more healthcare and the cost of healthcare increases, those two key drivers have an end result of more costly insurance. There is nothing in the Affordable Care Act that I’m aware of, or in any other legislation, that really addresses the cost of health insurance by addressing the cost or utilization of care.
Until we solve those two issues, we are going to continue to see employers on average receive double-digit rate increases every year.
How do we help citizens understand that cost is really tied to utilization?
BARLOW: As an employer, we’ve had success with health savings accounts. Our focus there has been an attempt to educate employees on the real cost of care, so it feels like it’s coming out of their pocket when in reality we are still providing the bulk of the funding resources for that.
I had one physician, a cardiologist, who came to me about a medication his child had been on for years, and he found a way to save $200 a month off of that medication. He had always had the opportunity and the knowledge to do that but never was engaged in it until the health savings account kicked in and the full cost was presented to him.
RUFF: We are a self-insured company. We provide healthcare benefits for all of our employees, but a lot of it is related to making them responsible for a portion of their own healthcare costs and educating themselves as consumers. When they become aware of what’s available, what the different choices are, then oftentimes, just like when they are shopping for other services, they make wiser choices about what they are going to consume and what they are not going to consume.
Unfortunately, we have a large segment of the population that’s not in that situation. They are covered by government programs or they have Cadillac programs where they just basically consume healthcare at will, and that’s not really sustainable.
HAMILTON: At Intermountain Healthcare, we are seeing a lot of our patients with high-deductible accounts, and they are much more cost conscious. I will get calls from patients or their families saying, “Do I really need to be an inpatient?” Or, “Why do I have to stay over one more day? I’m paying for a lot of this out of pocket.”
So we have seen that affect behavior, particularly people asking questions: “Do I really need this test? Do I really need these drugs?” Because they have a lot of out-of-pocket expenses, at least early in the year, until they use up the deductible. They are very much more cost conscious than we used to see in the past.
MCOMBER: The other piece of that is in taking control of their own health—they have to take some responsibility for some of the decisions they make. We have a big problem in Utah with obesity, and obesity drives up the cost of healthcare because of the different disease states they may get as a result of obesity. There are choices patients make that they need to be responsible for. We are looking at making providers responsible for outcomes, but we have to have patient responsibility in there too.
SPERRY: When we are trying to bend the cost curve, we have to realize that the vast majority of people spend virtually nothing on healthcare. It’s a very concentrated group of people who spend almost everything. And those people tend to have a chronic disease or a series of chronic diseases.
If we were to focus our attention as providers and as plan developers on incenting individuals with chronic diseases to have those things managed appropriately and aggressively, we would have a chance at bending the cost curve. If we don’t address that group of very expensive patients, we aren’t going to make much headway.
JOHNSON: Part of the challenge is that this is so complicated for the individual to understand and navigate through the system. Just yesterday I had someone talking about the numerous bills they received from a single procedure they had done. And this is an ongoing problem. The average person who is trying to work their way through the system and understand how to best use it—it becomes a big problem that a lot of those who are part of passing the legislation probably don’t understand. Part of the issue is the education and just learning how to best use the system.