Over the last decade, a major shift has occurred that has consumers more engaged in managing their own health care costs. The advent of Health Savings Accounts (HSA) coupled with High Deductible Health Insurance Plans (HDHP), an increasingly popular health insurance plan, has created a wave of consumer price consciousness in the realm of health care and medical services. The notion of “price shopping” medical services, once thought impractical or even impossible, is fast becoming the norm for millions of Americans who finally understand that they have some “skin in the game.”

Top health care experts and the medical community have been lamenting for years that one of the primary reasons health care costs have spun out of control is due to the disconnect between consumers and the actual costs of medical care. Employer-provided health insurance, the primary source of health care coverage for the majority of Americans, has created a buffer between covered employees and the prices that are charged and then reimbursed by insurance companies. The unintended result is that medical costs are not consumer driven; rather they are a product of negotiation between what the insurance companies are willing to pay and what medical community is hoping to get for its services.

Health Care Consumers Hold the Key to Price Pressure

A big part of the solution for bending the cost curve on health care costs, according to the experts, is to get more consumers engaged directly in the supply and demand dynamic of health care services. Until the recent movement towards HDHP plans, there has been little incentive for the consumer to do so. Now, with HSA/HDHP plans that require the consumer to invest more personal dollars into their coverage, they are paying much more attention. With an HAS, individuals are allowed to contribute tax deductible funds to a savings account that may be accessed to pay for qualified medical expenses. The individuals bear theses costs until the deductible on their HDHP is met.

The key to making the HSA/HDHP work is through increasing the transparency of hospital and doctor pricing on services provided, and that is still an uphill battle. In their attempts to shop services and compare prices, consumers are thwarted by the complexity and unresponsiveness of the medical community that has, heretofore, not really had to deal with the consumer directly. Consumers looking for price estimates on services are often given vague and sometimes conflicting responses if they get them at all.

More recently, several resources have become available that enable consumers to more easily compare pricing among major health care providers. Some websites have popped up that act as a “blue book” for medical services and provide consumers with some basis for negotiating prices. As the movement towards consumer-driven health care pricing continues, we should see more of these resources become available.

The trend towards consumer-based health care has been a positive development in controlling the cost curve of medical costs. There is evidence that even the medical community and the insurance companies see the ultimate benefit. The only potential obstacle for consumer-based, HSA/HDHP may be the new health care reform law which layers on requirements and regulations that would make it difficult for insurance providers to offer them.

photo credit: {Guerrilla Futures | Jason Tester}

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