Cynthia Persily, PhD, RN, FAAN
Dr. Persily is the CEO of Highland Hospital in Charleston, WV
I’m sure that everyone reading this today knows about unintended consequences. I wanted to share one with you that is impacting Highland Hospital in Charleston and patients who may need our care. Typically, an unintended consequence occurs when something “good” leads to something “not so good”. This is certainly the case in this example that I am going to walk you through.
As you know, several years about, the Affordable Care Act made it possible for those who couldn’t afford insurance to gain subsidies to pay for insurance through the healthcare marketplace or in some cases through incentives to their small employers. Consequently, many working folks were able, for the first time, to afford health insurance. These same folks may have been uninsured or even receiving Medicaid benefits in the past. This is the “good” part.
The problem is that many of those who were able to now afford that health insurance through the marketplace could only afford “high deductible plans”. To give you an idea of the scope of this issue, here are some statistics from OPEN MINDS, a company who monitors these trends.
- The average annual deductible paid by single adults with employer-sponsored health insurance increased by 67% – from $646 in 2010 to $1,077 in 2015.
- Since 2006, the share of workers in plans with a general deductible has increased from 55% to the current 81%.
- The average deductible for all covered workers has more than tripled, from $303 to $1,077.
- The percentage of workers enrolled in an employer-sponsored plan considered a high-deductible plan has increased from 10% in 2006 to 46% in 2015. A high-deductible plan is defined as one with a general deductible of $1,000 or more.
What does all this mean to Highland Hospital? Here’s the simple version. When a person has an insurance plan with a $1000.00 deductible, and their bill for their hospital stay, let’s say for sake of discussion, is $4000.00, their insurance company will pay Highland only $3000.00 if the patient has not “met” their deductible. The insurance company then requires Highland Hospital to collect the other $1000.00 from the patient. So, let’s think back to the beginning of this story. These are the same folks who could not previously afford insurance. They are unlikely to be able to pay $1000.00 over and above what their insurance paid, and what they paid for their insurance. And, Highland Hospital is left to absorb the $1000.00 as “bad debt”. That’s the unintended consequence.
We worry about this unintended consequence, not only for Highland Hospital, but for our patients. We know that some consumers will continue to self-ration care until their situation is dire. Or, they will incur large amounts of medical debt. Neither is a good situation for consumers.
We will continue to watch this, and are also watching it with our own employees, and trying to find some solutions for them so that they can avoid health care debt or self-rationing of care. But like most unintended consequences, it will take some time to see the full impact and to correct the course. Milton Friedman said “One of the great mistakes is to judge policies and programs by their intentions rather than their results”. Only time will tell about the results of this policy.