Something worse than severe illness is not being able to afford proper care. Internists and family-practice physicians are on the front lines of health maintenance organizations (HMO). Here, a comprehensive system of diagnostic services and medical specialists await patient referrals from these medical professionals. Most everyone can appreciate doctors who recognize their personal limitations by referring patients to other specialists when appropriate.
In a traditional HMO, a patient remits a nominal co-payment for medical services and lab work. Medicare or an employer pays the difference. In such an arrangement, a broad range of referrals and radiology testing may be welcome. To make healthcare accessible to more U.S. citizens, this model has undergone a dramatic change.
Many patients have a Health Savings Account (HSA) or High Deductible Health Plan (HDHP) that in other respects functions as an HMO. Particularly is this the case among self-employed and small businesses. In this arrangement, patients pay a monthly premium, a co-payment for medical services, a supplemental post-visit payment, plus regular payments to a special savings account.
Offsetting a high annual out-of-pocket maximum, deposits to this savings account for medical services are non-taxable. In theory, HSA funds remain until retirement age. Then they convert to an Individual Retirement Account (IRA) with withdrawals that are taxable at a lower rate. In practice, too many medical services deplete these retirement funds.
In order to afford monthly premiums, an annual HSA or HDHP out-of-pocket limit can range from $1,400 to $15,000 USD. Essentially, this is catastrophic medical insurance—protection against bankruptcy-level surgical bills. Yet, only 37 percent of Americans say they can afford to pay for a $1,000 emergency from their savings account. According to a 2020 Gallup poll, a collective 33 percent have prioritized financial considerations over their health.
Until reaching the annual out-of pocket maximum, HSA patients pay for all medical referrals—receiving an additional bill for services on top of the monthly co-payment at the time of visit. Even if a patient puts away $5,000 per year while deducting the same amount on medical expenses, there is no savings available upon retirement. This scenario is common among patients with chronic ailments or those who begin an HSA late in life.
Doctors typically prioritize quality of care over cost savings. Often, a medical billing code is the difference between a free routine 15-minute annual physical and an office visit costing hundreds or thousands of dollars. What may appear as thoroughness on the part of a medical team can be financially devastating to HSA patients. So at the risk of sounding “cheap” or non-compliant, patients explain their financial concerns to doctors and judicially approve or deny recommendations.
The pendulum swings when a patient reaches an out-of-pocket maximum early in the year. At this point, appointments may be expedited. The HSA patient more graciously accepts fully covered referrals. The switch from conservatism to comparative prodigality may bewilder physicians unaware of the insurance milestone.
It would be helpful if HSA and HDHP patient charts are flagged in a manner that alerts primary care physicians to limit expensive referrals, radiology, and medical procedures. Often times an experienced internist can make empirical evaluations. Instead of a “shotgun” diagnostic approach, can there be more selectivity?
For example, instead of an exploratory upper- and lower-GI gastroenterology referral, can a more thorough patient consultation lead to an effective prescription? Does a backache warrant X-ray, MRI, osteopath, physical therapy, and epidurals?
One specialist wrote a single prescription for 400 pills (with one refill available). The pharmacist had to order more and fill the remainder two days later. Imagine the shock upon being handed five large bottles of pills and being charged $150. For some patients, this is a bargain. But in this case, the drug was meant to be something to test out since a rash developed following a prior prescription. Use of the prescription ceased after a few days. Similarly, another prescription north of $400 was ineffective. Such careless prescriptions quickly consume HSA funds.
More than an HSA or HDHP sticker on a patient chart is in order. Without displaying the minutiae of patient remittances, healthcare systems need to alert physicians of a cautious yellow-light versus a green-light period for referrals. Such a feature requires not just physician training. Developers of medical billing software should include this option.
Each year, HMO physicians appear as though they are striving to reach patient out-of-pocket maximum deductibles. Conversely, patients try to preserve their savings. Doctor visits can be less stressful when both are working towards the same goal. Can you think of other ways quality care can take into consideration patient reduction in expenses?
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- Health Savings Account (HSA). healthcare.gov
- What are HDHPs & HSAs? healthcare.gov
- How does a health savings account (HSA) work?healthinsurance.org
- HSA accounts: The good news and bad news. marketwatch.com
- Some 66 million Americans have ‘zero’ emergency savings. marketwatch.com
- A stunning indictment of the U.S. health-care system, in one chart. washingtonpost.com
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