Financial Aspect of the Health Plans

Michael Thompson: Let’s talk a little bit about the financial side of this, which is that the escalation in cost sharing in the last 15 years has been astounding—how quickly it’s happened. It used to be that a $200 deductible was a big deductible, and today anything less than $1000 is considered a deal. I know, Bruce, you’ve actually done some studies on this, and you have a pretty strong view on what’s happening here.

Bruce Sherman, MD: Certainly. From the standpoint of healthcare utilization and cost, we know that lower-income individuals, who effectively account for about half the United States adult population, tend to delay, defer, or forgo care for the sake of cost. And that’s in the face of this increased prevalence of high-deductible health plans and high deductibles. And that is certainly not favorably influencing overall health. I think some employers, unfortunately, have misinterpreted their data to think that a reduced healthcare cost trend is equivalent to improved health status, when in fact it’s a consequence of people avoiding or delaying care.

Michael Thompson: And I know, Pat and Andy, that both of you have actually recognized this issue in your own strategies, and frankly you are in some ways ahead of the curve in adjusting your strategies around this. Andy, you could start.

Andrew Crighton, MD: I think as you look at the impact on lower-wage employees, people more in the entry-level positions, we differentiate the premium that they even pay for the plans. So an entry-level position will pay less for the same plan than an executive will. But then as we contribute to the health-savings account or anything like that, that’s based upon somebody’s grade level too. And so the entry-level person gets more funding in that health-savings account than the executive does too. So to offset that impact of going to get the right care, especially the episodic care or the chronic care, we’ve tried to factor that in and feel pretty well from our data that cost is affecting that and not negatively affecting someone’s ability to go get the right care.

Michael Thompson: And Pat, they’re not your employees, but it’s a very mission-driven population. I know it’s actually part of the charter of the Presbyterian church to take care of these people.

Patricia Haines: It is.

Michael Thompson: How do you reflect that in your approaches to support them on benefits?

Patricia Haines: Well, first we’ve been very slow to pick up on high-deductible health plans. This is the first year we’ve actually offered it to our employers as a choice that they might use to offer to their employees and pastors. So our basic program is a PPO. People might say, “Wow, you still have a PPO?” Yes, we do, and probably 80% of our members are still enjoying the benefits of a fairly rich PPO to begin with, but the deductibles themselves are all income index. There are 10 different deductibles, and they’re indexed to annual incomes.

Michael Thompson: And I know in the culture of the Presbyterian church, shared mutuality is a key value.

Patricia Haines: What’s good for 1 part of the body is good for the entire body, and so it is a community, and the community supports one another.

Michael Thompson: And so I think a lot of this really comes back to rethinking this in the context of your values and your talents, and then strategizing more broadly.

Andrew Crighton, MD: Right.

Bruce Sherman, MD: Mike, I want to come back to that point. I think there’s another issue that a lot of employers just haven’t addressed, and that is value and where the value is in improving the health of the workforce. And as much as there may be a shared value in providing these more equitable health benefits, I think employers also have to start to look more at what the value is to the organization and how, for example, is someone who is selling insurance or a pastor who is supporting a congregation made healthier by accessing equitable benefits in a way that allows them to do their job more effectively.