It is just not the pricing that makes healthcare affordable. How the healthcare spending is clustered during the year contributes significantly to the cost, a recent Health Affairs article concluded. The 2017 IBM MarketScan Commercial Claims and Encounters database was used to come to findings. It pointed at a pattern: one or two engagements with the healthcare system was enough to accrue a strong portion of the member’s healthcare spending.
- According to the report only 10 percent of commercial members with out-of-pocket expenses each month. However, 44 percent accrued costs over six months. Even more than a quarter of commercially insured Americans shelled out a total of $400 out-of-pocket in at least one month. Hospitalizations remain the main cause of out-of-pocket healthcare spending. At-least for 13 days during one year period, most members of commercial insurance plans engaged with the healthcare system.
- Over eight in ten commercial members (83 percent) paid for their own healthcare costs to some degree, with an average annual cost-sharing amount of $954. Approximately 11 percent of commercial insurance members had zero engagements with the healthcare system. Six percent of commercial members had a single engagement but did not have to pay for it.
- For around four in ten members, a single health system engagement was responsible for 50 percent of their annual out-of-pocket healthcare spending. Slightly more than a quarter of commercial members (26 percent) saw 90 percent of their out-of-pocket healthcare spending go towards just one or two health system engagements.
- A little over a third of commercial members who had low demand boasted zero cost-sharing, but 44 percent spent half of their 2017 out-of-pocket healthcare spending amount in one day. At the other end of the spectrum, 49 percent of those who had higher spending accrued $400 in healthcare costs within one day and two-thirds of those with higher spending hit $400 or more in a month. Less than one percent of the study’s population reached the individual health insurance out-of-pocket healthcare spending cap of over $7,000.
- The researchers found possible reasons for the pattern: the populace was generally healthy, needing only select services that were clustered together and members who meet their out-of-pocket maximums face low cost-sharing despite a high demand for care.
- The report concludes that payers could address this issue by setting a lower deductible cap, although the researchers acknowledged that this would raise premiums. Payers could also carve out high-value care from deductibles through value-based care, but this could complicate payment for members.