Employees Need Incentive to Reduce Health Costs

Health care costs are affecting household budgets, but individuals do not know how to shop for health care.

“Progressive health plans and employers have harnessed transparency and incentives programs to drive down the cost of health care by paying patients to comparison shop for better value care,” says Mitch Rothschild, executive chairman and founder of Vitals, provider of a health care marketplace that makes consumers aware of the cost, quality and availability of health care provider options.

As we enter the health care open enrollment period, for both employer and ACA marketplace choices in health insurance plans, nearly one in four Americans report they don’t know the amount of their health insurance deductible, a Vitals survey finds. With more than half of the respondents stating that medical costs “seriously” or “very much” impact their household budget, it would seem more Americans need to get a handle on out-of-pocket health-related medical costs, Vitals says.

According to Vitals’ survey, two-thirds of American adults have been surprised by a medical bill in the past 12 months, and approximately three out of five never ask their doctor about the cost of medical services they are about to receive.

While 28% of respondents said price of care wasn’t discussed because they believed insurance would foot the bill, another 30% stated they didn’t think their doctor knew the cost. Another 16% said they weren’t aware they could ask about the price of medical services.

While health plans control much of the cost by negotiating rates with providers, as more of the cost burden shifts to individuals through high-deductible health plans, access to accurate and clear price data is necessary to help Americans find cost-effective care, Vitals contends. Only 7% of respondents said they receive incentives from their health plan to shop for cost-effective care, although incentives have been shown to modify consumer behavior.

The survey revealed 50% of consumers would drive an additional 30 minutes to a high-quality MRI center for a $100 cash reward. More than 60% would travel an additional 30 minutes to get to a high-quality surgery center for $200 or less.

Another problem is that people do not spend time researching health plans. A recent survey from Aflac found that, in spite of reporting their medical copays and other out-of-pocket costs are more than they can afford at times, many employees said they would rather clean their toilets or complete their tax returns than research their benefits.