Tuesday, January 15, 2013

Fwd: qotd: Life disruptions from high out-of-pocket health expenditures

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-------- Original Message --------
Subject: qotd: Life disruptions from high out-of-pocket health expenditures
Date: Tue, 15 Jan 2013 10:15:14 -0800
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>

Annals of Family Medicine
January/February 2013
Life Disruptions for Midlife and Older Adults With High Out-of-Pocket
Health Expenditures
By David Grande, MD, MPA, Frances K. Barg, PhD, Sarah Johnson, BA and
Carolyn C. Cannuscio, ScD


PURPOSE Out-of-pocket cost sharing for health care expenses is a
growing burden. Prior research has emphasized the medical consequences
of cost sharing. This study investigates the range of social, medical,
financial, and sometimes legal disruptions from high out-of-pocket
health expenses.

METHODS We conducted open-ended, semistructured interviews with 33
insured patients (two-thirds covered by Medicare). All had chronic
illnesses and sought philanthropic financial assistance.

RESULTS We found that high levels of cost sharing precipitated
considerable anxiety and substantial debt problems, as well as
disruptions of medical care. Participants described various borrowing
strategies (eg, credit cards), legal problems (eg, debt collections),
and threats to their nonmedical household budgets (eg, food, housing).
Participants described explicit and rank-ordered strategies for coping
with new medical expenses. Participants understood their health benefits
with exceptional detail but described considerable anxiety about changes
to those benefits that could easily disrupt carefully managed household
budgets. Benefit designs that resulted in large variations in financial
liability from month to month (eg, large deductibles or coverage gaps)
imposed considerable financial challenges.

CONCLUSIONS As health care cost sharing grows, policy makers will need
to consider the consequences of high cost sharing for families facing
strained household budgets. Although the generosity of health insurance
is important, continuity of benefits and month-to-month stability of
financial liability are also important and may be undervalued in policy


From the Results:

Four issues figured prominently. First, the structure of health
insurance—especially gaps in coverage, such as the Medicare Part D
"doughnut hole" — powerfully affected financial well-being. Second,
financial stress and debt from medical expenditures had a strong
influence on day-to-day personal, financial, and medical decision
making. Third, participants turned to family and other sources to help
manage the costs of their illnesses, which resulted in financial,
emotional, and social challenges for all family members. Fourth,
participants managed high out-of-pocket health care costs using a range
of strategies that were potentially disruptive to their medical care.


Comment: We have plenty of studies which demonstrate that out-of-pocket
cost sharing for health care can expose patients to significant
financial burdens and impair their access to care. This study provides a
valuable addition to our knowledge base because it demonstrates just how
disruptive these expanding innovations in cost sharing can be.

This study does not quantify the problem, nor was it intended to. Rather
it provides us with a qualitative assessment of those who do face
insurance-induced financial barriers to care, including, significantly,
cost sharing in the Medicare program (part of the reason we want an
improved Medicare).

Read the last paragraph in the excerpts above, under "From the Results."
These insurance innovations that supposedly are designed to make
patients better shoppers of health care are causing severe financial
stresses, unwise but unavoidable choices in forging health care, while
fostering "financial, emotional, and social challenges for all family

How well will the Affordable Care Act address these problems? First, the
design of the essential health benefits required of the plans, although
fairly broad, allows important benefits to be excluded as long as there
is token representation of each general category of benefits. Also most
exchange plans will penalize patients for obtaining care outside of
their networks - again impairing affordability and access to important
services that may be available only outside of the networks.

Probably the most significant disruptive element in the exchange plans
is that most people will be enrolled in plans with either 60 or 70
percent actuarial value. Most of the plans will achieve these low
actuarial values by requiring high deductibles and perhaps co-payments
or coinsurance - some of the very tools that result in the disruptions
described in today's article. Although the Affordable Care Act does
provide subsidies for both premiums and out-of-pocket expenses, for many
individuals these subsidies will not be adequate to prevent the
disruptions described.

Many nations with far lower total health care costs than ours are able
to provide comprehensive health care for everyone - with first dollar
coverage! They do not need to use disruptive out-of-pocket cost sharing
to keep their level of spending sustainable. It is no secret how they do
it. So why do our policy makers seem to want to keep it a secret here in
the Unites States?

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