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Choose Wisely

Employers love high-deductible insurance plans. They’re designed to deter patients from seeking care — and they work.

A doctor consults with a patient, November 1990. Bill Branson / National Cancer Institute

American health care spending is about twice as high as the average for comparable nations. Pretty much everyone besides those who directly profit from those expenditures realizes that this is an outrageous problem — especially because our care quality is by many measures inferior. No matter how you spin it, we’re not getting what we’re paying for.

But not everyone agrees on what’s driving the problem. Some say the culprit is rising prices — including administrative, pharmaceutical, and equipment and supply prices — set by unchecked private corporations. That seems reasonable given that our public spending is on par with similar countries; it’s our private spending that’s through the roof. But other experts gravitate toward a different explanation: American health care spending is so high, they claim, because of frivolous spending on the part of careless patients. In an echo of the austerity logic that pervades neoliberal politics, health economists and policy experts say that to bring costs down the American people must be conditioned to consume more responsibly.

Experts who buy this behavioral explanation for high health care costs tend to advocate for high-deductible insurance plans (a deductible is the amount the patient has to pay out-of-pocket before insurance kicks in). They argue that raising deductibles, and thus transferring a higher portion of the financial burden of care to patients, will give consumers more “skin in the game,” presumably so they’ll think twice before ordering unnecessary MRIs and blood work willy-nilly.

Employers have been highly receptive to this expert advice (little wonder — high-deductible plans are cheaper for employers). As a result, enrollment in high-deductible plans has doubled in under a decade. About half of Americans with employer-provided insurance now have a deductible of at least $1,000, and over 10 percent have a deductible of more than $3,000. About a third of employers offer only high-deductible plans to their employees.

If the consumer behavior explanation were adequate to explain soaring health care costs, high-deductible health insurance plans would have by now had an observable effect on national health care spending. But that hasn’t happened. Health care spending has gone up even as high-deductible plans have become more popular. And high deductibles haven’t conditioned people to avoid unnecessary or “low-value” health services, either. One study found that high deductibles “encourage patients to curb spending indiscriminately rather than specifically reducing low-value services.” High deductibles don’t deter patients from seeking unnecessary care specifically, but from seeking care in general.

And that’s the problem with high-deductible plans: while they don’t solve our health care spending crisis, they do actively deter patients from getting care they desperately need. For example, a recent study of breast cancer patients found a strong connection between high deductibles and delayed care. A high deductible means higher out-of-pocket expenses, which for many people spells financial distress, leading them to steer clear of doctors. For women with breast cancer, this financially motivated care-averse behavior can be fatal.

The New York Times recently spoke to a woman named Pam Leonard whose insurance plan carries a deductible of $2,600. When Leonard discovered a lump in her breast last year, she froze. Instead of immediately pursuing a mammogram and ultrasound, Leonard, a teacher in Kenosha, Washington, sat at home weighing her options. “I went back and forth for a couple of weeks,” she recalled.

Leonard was fortunate — she was able to receive a small grant from the Susan G. Komen foundation to pay for tests and began treatment before it was too late. But the study, conducted by Harvard physicians, found that women with high-deductible health care plans “experienced delays in diagnostic breast imaging, breast biopsy, early-stage breast cancer diagnosis, and chemotherapy initiation.” In fact, they delayed beginning chemotherapy by an average of seven months. And of course, charitable foundations like Susan G. Komen don’t have the capacity to fund tests for every woman with a high-deductible health insurance plan.

One of the reasons high-deductible plans don’t appear to correlate to lower national health care spending is that people postpone care in ways that exacerbate health problems, which just leads to more spending later. Last year, CNN reported a story that illustrates the principle: a fifty-five-year-old California woman with a $68,000 a year salary and a high-deductible health insurance plan injured her back lifting a heavy object at home. The next day, she was barely able to walk. Two years later she had yet to see a specialist, saying, “I’m in pain every day, [but] it’s not bad enough to go into debt.” Untreated back injuries can lead to permanent disabilities, but when the choice is hypothetical disability versus guaranteed financial calamity, many people will take their chances. As a result, our national health care spending stays the same while ordinary people’s health deteriorates.

But the main reason high deductibles aren’t leading to lower health care costs overall is that extravagant or wasteful consumer behavior isn’t the main problem to begin with. The problem is corporate profit-seeking. Insurance companies pay their CEOs over $20 million a year and spend up to 30 cents on every dollar in administrative costs. That is wasteful. Pharmaceutical companies put generic drug providers out of business so they can corner markets and jack up prices at patients’ expense. That is wasteful. Manufacturing giants pressure hospitals into buying expensive equipment they don’t need by threatening to withhold medical necessities, without which patients will die. That is wasteful and inhumane.

The real reason high-deductible plans have proliferated is that they’re popular with employers, because they reduce costs and increase profits. Meanwhile they are a form of private-sector austerity, curtailing access to everything from cancer treatment to preventative care — especially for people who are in financial straits to begin with — and shifting the responsibility onto patients to “choose wisely”. But the evidence keeps coming in, and it increasingly exposes the supposed rationality of high deductibles as a sham. High deductibles aren’t a solution to our nation’s health care spending crisis; they’re a threat to public health.

Of course, there is a solution to exorbitant health care spending that also increases average people’s access to care itself: single payer, or Medicare for All. Such a program would publicly finance everything that requires a medical doctor, with no deductibles whatsoever, and would reduce national health care spending at the same time. The only thing that would suffer is health executives’ pocketbooks — but if we really want an improvement in care quality and health outcomes and an abatement of outrageous costs, something’s gotta give.