High-Deductible Health Plans, Cost as a Toxic Side Effect, and the Thousand-Dollar Pap Smear

Posted on Oct 16th, 2013 at 1:05pm.

A trio of Perspective essays in the October 17, 2013 issue of the New England Journal of Medicine compels me to provide my own perspective on how these three issues—the emergence of high-deductible health plans, the toxic side effects of out-of-pocket costs, and the “Thousand-Dollar Pap Smear” i.e. the ridiculous pricing of many laboratory and other technical services—intersect at the critical moment when doctors discuss diagnostic and treatment plans with patients.

For some 20 years, I cared for patients in two very different settings: metropolitan Minneapolis, where most patients had first or near-first-dollar coverage, and rural Marshall MN, where many of my patients had what they called “farmer’s insurance,” which typically had a $5,000 deductible, but which protected them from losing the family farm if they had a catastrophic illness. Early in my Marshall experience, I would recommend lab tests, imaging studies, and medications just as I did in Minneapolis—only to be confronted with questions I never heard in the big city: “Doc, how much are these pills going to cost?” and “Doc, is this test really important? I’ve heard that MRIs cost over $1,000.” And the most important question of all, “Doc, is there something that would work about as well, but cost less?” In Marshall, I rapidly learned that one of the key roles of physicians is to advise patients on the value of various options in diagnosis and treatment.

But when I adopted these same approaches with patients who had first-dollar coverage in Minneapolis, the response was “Doc, I’m not paying for this, my employer is. I don’t care what it costs. Are you trying to skimp on my care?”

The best rule for any business is to “Give the customer what she wants…and is willing to pay for.” I predict that high-deductible plans will cause a decrease in the price of costly services, simply because patients will not be willing to pay for them.  Perhaps it is already happening. Two weeks ago, I drove past a billboard in Oregon with a picture of a smiling radiologist and the announcement:  “High deductible? No insurance? No problem! MRI--$495.”

As for the risk that patients will deny themselves necessary services, it seems to me that the most vulnerable patients (Medicaid) currently have the most generous benefits of any insurer, public or private, in most states. Medicaid patients are not commonly faced with the high copay/deductible questions that my farmer’s families raised. For the wealthy, on the other hand, a certain amount of cost sharing might provide a good brake to counter the supply- and technology-driven cost accelerator that plagues our system. And for those with modest incomes, high-deductible health plans protect them from bankruptcy in case of serious illness, (isn’t that the primary purpose of “insurance?”) but cause them to engage their physicians in serious conversations on the question “Doc, is this worth it?” In my experience, that is a very important conversation, and a wonderful opportunity for the physician to become a trusted advisor on the value of services, medications, and other interventions.