Out-of-Pocket Costs Hamper Utilization

Higher out-of-pocket costs reduce utilization, according to a report by PricewaterhouseCoopers. The report (http://pwc.to/vYdbaE), based on a survey of 1,000 people, collected consumers’ perspectives on what sort of health care services they prefer and what they think of the changing health care landscape.

“Higher deductibles and co-pays have suppressed utilization,” the report states. The plan design showing the greatest growth rate is the high-deductible plan. “The percentage of employers whose most-enrolled plan was high deductible went from 13 percent in 2010 to 17 percent in 2011.” Unfortunately, “high-deductible health plan (HDHP) enrollees cut back on preventive services such as childhood vaccinations, mammography, and cancer screenings.” In addition, “a higher percentage of HDHP enrollees didn’t fill or refill prescriptions.”

It wasn’t just enrollees in HDHPs who cut back on utilization. “Regardless of health plan, 46 percent of consumers surveyed … said they have deferred care in the past year because of cost.” In the meantime, the report notes that the “identities of providers and insurers are blurring as they team up to harness data across the spectrum of care and benefit from new payment models.”

Health insurers have committed more than $2 billion in the last year to acquire or align with physician groups, with certain deals making headlines, including Highmark’s investment in West Penn Allegheny Health System and Optum’s purchase of a 2,300-doctor physician group. Optum is a subsidiary of UnitedHealth Group.

PwC says that 72 percent of consumers want integrated care models, feeling that such models will lower costs and improve quality.

“If these provider-insurer partnerships are able to achieve results similar to recent Medicaid-provider partnerships, the impact could be substantial,” the report says.