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Chattanooga: Tough economy worsens sting of out-of-pocket health costs

By: Emily Bregel
(Contact)

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Sara Collins

A tough economy and a continuing trend toward high-deductible health insurance plans — which can require thousands in out-of-pocket expenses before full coverage kicks in — appear to be leading some patients to scrimp on medical care and delay doctors’ visits, local physicians and practice managers say.

Both Memorial Hospital and Erlanger hospital’s physician services managers said they are seeing a dip in appointment numbers at some practices, particularly pediatrics. Patients also more often are forgoing follow-up appointments or opting to call their doctors instead of visiting, they said.

They attribute the drops to a combination of the economy and a growing cost burden on patients.

“We’ve seen a downward trend in visits across the group for a number of years as high deductibles have occurred and as copays have gone up,” said Paula Register, CEO of Memorial Health Partners, the hospital’s physician group.

The declines have been small, she noted. For example, one of the hospital’s largest pediatric practices has had a 2 percent decrease in patients year-to-date compared to 2007, which probably is fewer than 100 appointments, she said.

Parkridge Medical Center officials said they recently have heard concerns from the hospital’s 26 staff physicians about a higher rate of bad debt among patients and a spike in no-show appointments, prompting the hospital to undertake a study of the issue.

The hospital is working on an analysis to determine how much of the change might be because of high-deductible plans and how much could be because of today’s economic challenges, said Keith Underwood, local market manager for HCA Physician Services. HCA is the corporate health system that operates Parkridge.

“It’s something my doctors are reporting to me, and before we implement any kind of fix for it I want to measure it and see how dramatic it really is,” he said.

AN ONGOING TREND

Deductibles have been rising for years as legislators, insurers and employers look for ways to slow rising health care costs.

High-deductible plans typically cost 50 percent less in monthly premiums than traditional plans with copayments, but they do not pay for the first several thousand dollars of health care costs. By shifting the cost burden to patients, the policies also aim to encourage enrollees to avoid unnecessary or overpriced medical care, thereby lowering overall health care spending.

National figures show a relatively small number of patients are signed up for high-deductible plans, though they are growing in popularity.

Enrollment in high-deductible health plans increased from 9 percent in 2005 to 11 percent in 2007, or about 12.5 million people, according to a March survey by the Commonwealth Fund and the Employee Benefit Research Institute.

Dr. Collin Cherry, an internist with Beacon Health Alliance in Chattanooga, said his primary care practice is as busy as it has ever been. He said the shift toward more patient responsibility for costs is a positive change.

“High-deductible health plans are actually good news,” he said. “They’re one of many solutions, options available to companies and individuals to try to make health insurance more affordable and to try to bring the patient into the process of making smart health care purchasing decisions.”

But sluggish growth in annual income is adding to the increased cost burden now placed on patients, said Sara Collins, an economist with the Commonwealth Fund, a New York-based foundation that examines health care issues nationwide.

“People are carrying a larger share of their health care dollar at the same time their incomes aren’t keeping up,” she said.

A July national survey of 686 people, released last week, found that 22 percent of those surveyed said they have reduced the number of times they see the doctor because of the economy. The survey was conducted by the National Association of Insurance Commissioners, an organization of state insurance regulators that aims to protect the interests of insurance consumers.

Raising patient and physician awareness of the cost of health care is a positive trend, but shifting the cost burden to patients could have adverse consequences, said Dr. B.W. Ruffner, former dean at the University of Tennessee College of Medicine in Chattanooga.

“In a perfect world you want physicians ... to think twice before they order some test and procedure that really is of marginal value,” he said. “That’s the idea behind it, but the bigger issue is if (the patients) don’t even come to the doctor to begin with.”

IMPROVEMENTS IN PLANS

Insurance policies with high deductibles have improved over the years, experts here said. High-deductible plans now offered by local insurers feature copayments of about $20 for preventive care such as routine checkups and, in recent years, drugs to lower blood pressure and cholesterol, said Russ Blakely, an employee benefits consultant in Chattanooga.

Health savings accounts are one of the latest additions in the trend toward consumer-directed health care. Created by 2003 legislation, the tax-free savings accounts must be used in tandem with high-deductible plans.

The theory is that out-of-pocket expenses, before the deductible is met, can be offset by using money in the health savings accounts, which are funded by employees, employers or both. Critics say these plans can burden chronically ill or low-income enrollees.

Dr. Colleen Schmitt, a gastroenterologist with the Galen Medical Group, said her office gets noticeably fewer patients at the start of the year, when patients with new health savings accounts have not yet accumulated any money to cover their out-of-pocket expenses. But patients who delay important follow-up visits are worrisome, Dr. Schmitt said.

“I’ve had people cancel their surveillance exams, when they’ve had known polyps (which could be cancerous,) and I know it’s because of their high-deductible plans,” she said.

Plastic surgeon Dr. Thomas Beahm said he has noticed a bit of a dip in appointment volumes this year, particularly in his surgeries for cosmetic purposes, but he attributes that primarily to the economy.

“If they’re coming in for elective follow-up or something like that and they have the choice of buying gasoline or buying a doctor’s appointment, unless it’s really something urgent, they’re probably going to think twice,” he said.

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