It is hard to believe that it has been more than seven years since the Medicare Prescription Drug, Improvement, and Modernization Act created health savings accounts (HSA). In 2004, the pundits were espousing how consumer directed health plans (high deductible health plans tied to a HSA or health reimbursement account (HRA)) would put more healthcare spend into consumers’ hands and in-turn, consumers would demand more price transparency across the healthcare system. Consumers were supposed to be able to use their new-found purchasing power to comparison shop and ultimately choose the healthcare services that provide the best value.
In a March 2005 report entitled Will Health Plans Profit from HSAs? Forrester Research projected that by 2010 there would be 15.9 million HSAs and HRAs holding $17.5 billion in assets. Actual figures have trailed projections, but the move to HSAs and HRAs has continued to gain momentum. Employee Benefit Research Institute® recently published that the number of HSAs and HRAs has grown from 1.2 million in 2006 to 5.7 million in 2010. These accounts now hold $7.7 billion in assets, creating meaningful healthcare purchasing power for consumers.
Despite all of this growth however, comparison shopping for healthcare remains challenging.
- While employers have attempted to provide price transparency tools, they have struggled with getting detailed pricing information from providers that would enable informed employee (consumer) decision making.
- Health plans have been unable to provide their members with real-time adjudication capabilities that would allow them to understand in-network pricing for services.
- Services marketed directly to consumers (with features like convenience, affordable pricing for acute care, etc) tout health plan reimbursement as a secondary feature.
This last trend started with retail clinics, such as CVS Caremark’s MinuteClinic and Walgreens’ Take Care Clinic; that effectively promote the price of services prominently at their clinics and on their websites. In a market like Minneapolis, two large healthcare organizations (UnitedHealth Group and Health Partners) are taking similar but distinct approaches via recently announced online clinic, prescriptions and doctor-patient medical consultation services.
- UnitedHealth Group’s OptumHealth has launched NowClinic, which offers 10 minute online visits with clinicians for $45. The service is now offered in five states, and while OptumHealth is offering discounted prices to contracted employer groups, consumers must pay for all services directly as OptumHealth does not currently accept health insurance.
- HealthPartners, a regional healthcare provider and health plan has launched a competing online service called Virtuwell. At Virtuwell, online consultations cost $40, and the service accepts insurance plans from HealthPartners and CIGNA.
Both announcements tout convenience as the key feature and could be an easy purchase decision for some consumers. Even if not reimbursed by insurance, consumers may opt to spend $40-$45 out of pocket without having to leave their home, when comparing the alternative of driving to a doctor’s office, paying for parking, and waiting in the waiting room with other sick people. This decision would be made even easier for consumers that do not reach their health plan deductible during the year and thus would not get reimbursed if they visit a traditional doctor.
With HealthPartners as an exception, traditional healthcare services providers have been slow to adopt both price transparency and convenience. As healthcare delivery models change and new players enter the market, it will be interesting to watch how traditional healthcare providers evolve to accommodate increased expectations from consumers who are more informed and demand options for where, when, and how quickly they can interact with clinicians.
There is no question that as more payment responsibility is placed in consumer hands, providers will change, the question is how quickly this will occur and which firms will benefit most.
Let us know what you think.