Thursday, October 22, 2015

The Growing Affordability Crisis

Record numbers of Americans have health insurance, largely because of the Affordable Care Act.  Yet there is growing concern that even with insurance, many people are not able to afford the care they need:

- For over a decade now, employers have been shifting more costs onto employees.  The Commonwealth Fund reports that in 2003, only 1 percent of privately insured persons had deductibles of $3000 or more; in 2014, it was 11 percent, a greater than 10-fold increase.  In 2014, 27% were enrolled in plans with deductibles between $1000 and $3000 compared to 7% enrolled in such plans in 2003.

- The increasing amount that people have to pay out-of-pocket has resulted in millions of Americans becoming underinsured—they have insurance, but have to pay so much out-of-pocket that it creates a barrier to obtaining needed care.  The same Commonwealth Fund analysis finds that 31 million privately insured persons in 2014 were underinsured compared to 16 million in 2003.  (Underinsurance was defined by Commonwealth as out-of-pocket costs being 10% or more of income, 5% for lower-income persons; or the deductible is greater than 5% of income).

- The fund also found underinsured persons were less likely to get needed care: “insured adults with coverage all year who had health plans with high deductibles were more likely than those with low or no deductibles to report cost-related problems getting health care. More than two of five (44%) privately insured adults with a deductible of $3,000 or more reported not getting needed care because of cost compared with 16 percent of adults who did not have a deductible. Many underinsured adults with health problems reported difficulty caring for their conditions. Among adults with at least one chronic health condition, a quarter (24%) of those who were underinsured said they had not filled a prescription for their condition or had skipped a dose of their medication because of cost, compared with 7 percent of those insured all year and not underinsured. . .  Similarly, underinsured adults with chronic health conditions were more likely to say they had gone to the emergency room or stayed overnight in the hospital for their condition than were insured adults with health problems who were not underinsured.”

- The rising cost of prescriptions and generic drugs is also creating an affordability crisis for many.  A report by Express Scripts found that 15.7% of people enrolled in Medicare, Medicaid or commercial insurance had annual drug costs of $50,000 or more. Nearly two-thirds of those with annual drug costs of $100,000 was for hepatitis C, cancer, or compounded treatments.

For people enrolled in the marketplace plans offered through the Affordable Care Act, cost-sharing subsidies are available for those who earn less than 250% of the federal poverty level.  Such subsidies, however, are not available to those enrolled in commercial insurance plans.  And while most people enrolled in the ACA’s marketplace plans are satisfied or very satisfied with their deductibles and co-pays, the number one reason cited by eligible uninsured persons who have not enrolled is that the plans were too expensive.

The bottom line is that the high deductibles that are increasingly common in the commercial and employer-based insurance sectors, combined with the rising cost of medications, may be contributing to a new healthcare affordability crisis.  Getting more people covered, as the ACA clearly has done, is a worthy and essential reform.  But so is making sure that out-of-pocket costs and medication prices aren’t so high that even insured people can’t afford the care they need.

Today’s question:  What should be done about the growing affordability crisis?


Robert J. Sobel, M.D. said...

The PBM's are putting private pharmacies out of business, but claiming that they are saving billions with their cost saving tactics. This has occurred under our noses while we fight to figure out whether I am 5% better or worse than my colleagues. I am so fed up with the insanity of having any expectations that for-profit, publicly traded entities have any chance in hell of saving money. States are feeding their Medicaid dollars to Managed Care. Everyone tells us how I care about volume and ignore quality. I'm too busy converting my diagnosis codes so I can make sure to get them just right for my CPT codes to reiterate what I've now said for years on this blog.

We knew damn well "skin in the game" was a rouse. Quit asking for help when you've heard lots of good answers from many of us for years. I guess it hides the obvious powerlessness we have against restructuring health care in a way that respects patients and physicians. It is not my job to get GLP-1 agonists to cost less. It is not my job to police the generic drug makers who do predatory pricing. It is not my job to switch back and forth at the whim of CVS or Prime or Blue Cross and their formulary de jour.

Sorry, I mis-spoke. That is my job in this morass. I could give up and say no to any new agents. I'm sure my patients would love the arbitrary exclusion of all new choices, even though they have to pay more to see me. More cost at less value has become the defining aspect of our new system. We've been had and the implosion seems to be beginning. Welcome to medicine by Watson and the chaos that that will bring.

southern doc said...

The ACP has been a willing tool in the corporate takeover of medical care in this country, and now you tell me it's my responsibility deal with the fact that corporations like to make money? Sorry, I didn't cause this mess, I didn't profit from it, and I can't fix it.

As long as the insurers pay the doc in the office across the street 500% of what I get for the same services just because he's owned by the academic medical center two counties over, I don't give a damn.

Life is too short.

Jay Larson MD said...

Our healthcare system is permeated by greed. If patients survive our system, it is probably more by luck than intention. We have the most expensive healthcare system that has to be paid for by someone. Rarely does one part of the system realize that when they take a bigger slice of the healthcare pie, it is at the expense of another part. Primary care has been on the short end of the stick most of the time. If insurance companies do not want to pay for something, it does fall on the patient’s shoulders. Unfortunately those of us in the trenchs are the ones wrestling with decisions about impact on the patients. Pharmaceutical companies and insurance companies are always making deals…sell more of my product and we will give you a rebate. More often than not a medication ends up on a formulary because of price breaks rather than patient tolerability or outcomes. PCP’s are not privy to the deals so we are constantly prescribing medications like Russian roulette. Sometimes the medication is covered, sometimes not. Pharmaceutical companies don’t care how their product is paid for, they just want their product to be sold. I do not see any hope in sight for the greed monster to be put away so things will continue on the path they are going. More out of pocket costs to patients more frustrations for PCPs.

PCP said...

Well said by the 3 posters above. Though I don't do primary care anymore, The frustration you feel is palpable and appropriate. In fact it is amongst the reasons for my exit in 2008 and changes have apparently only accelerated since.
Alas, another day another deal, Walgreens buys Rite Aid today, and the wave of consolidation and the extinguishment of independent practitioners/small players of all stripes continues undiminished as we race towards the oligopoly structure in healthcare. Yet we are told it is a free market.
The ACA has exacerbated the worst excesses of the system, and the scope,scale and rate of these mergers and acquisitions is astonishing to any neutral observer. This happens on the back of the farcical structure where bigger gets paid better, rather than on truly competitive strength.
Other factors mentioned ad nauseum on this blog that are bringing about this trend need not be repeated.
Yet the federal gov't seems keen on them proceeding as they aren't really stopping them and in fact writing policy to endorse/encourage them. Or should i say the industry lobbyists are writing it. Our healthcare system is devolving towards something cloer to an oligarchic kleptocracy.
As usual organised medicine is whistling past the graveyard, eiher unable or unwilling to do much about it. Patients and Physicians are suffering for it, as our corporate masters increasing sell less value as more.

W. Bond said...

Yet isn’t this exactly what anyone with any basic economic intuition would have predicted with the passage of the bill you championed? A redundant truth: in the aggregate there is only source of the payment for healthcare in America – Americans.