Culture shock: Consumer-directed health care slow to catch on

Family physician Don Gibson, MD, isn't too keen on talking about bills with patients. Usually, he said, if a patient asks about the price of a visit or a test, he refers them to "the people at the front desk," who manage the billing for his solo practice in Richland, Miss.

His hesitance to talk about the cost of care or a patient's bill is just the way he was trained, Dr. Gibson said. "I do have to talk about money more. I personally don't like to be a part of it, but at times I have to be a part of it."

The discussion about money is happening more often, in part because some patients now have high-deductible health plans paired with health spending or flexible spending accounts -- also known as consumer-directed health plans.

Advocates of such plans say that giving patients first-dollar coverage will get them more involved in their health care, and more involved in discussing the costs. But analysts say those plans are growing more slowly than expected because of a perceived taboo about patients and doctors discussing the cost of care.

"There's no question that there will be certain individuals who just don't feel comfortable having this discussion related to their financial situation, period," said Jacque Sokolov, MD, chair and senior partner at health care consulting firm SSB Solutions.

It appears many patients and physicians are having a difficult time turning health care into a consumer-retailer discussion.

"I'm only concerned about their medical problem," Dr. Gibson said. "I don't like that term, 'consumer,' even though I guess there's some truth to it. I've always considered them my patients, not consumers."

Health care analysts believe that the cultural and psychological reasons people avoid talking about the cost of care may be as powerful or more powerful than any economic factors influencing the move from managed care to consumer-directed health care.

Analysts say there might be only one way to push the growth of consumer-directed care, and it is the same way managed care grew: by payers essentially forcing patients into such plans. And in a few cases, some payers are doing just that.

Inside the exam room

American Medical Association policy supports health savings accounts as a part of its broader health system reform campaign aimed at reducing the number of uninsured. AMA policy also supports greater efforts to educate patients on the advantages of HSAs.

Companies that offer high-deductible health plans have sold them to employers on the idea that, while patients would pay a higher deductible, the businesses would pay out less per month for insurance.

Enrollment in consumer-directed health plans initially grew rapidly, but various studies have shown it stagnating. Fewer than 3 million of the 155 million people who get health benefits at work were enrolled in consumer-directed plans, according to a study by the Kaiser Family Foundation and the Health Research Educational Trust. Consumer-directed health plans make up just 7% of employer-provided health insurance offerings.

The limited growth of consumer-directed health plan enrollment is at least in part due to the exam room taboo: A typical patient, sitting in an open-backed gown on top of an examination table, doesn't want to talk about money. And doctors don't want to be the ones to bring it up.

The relationship between patient and physician -- sometimes brief, sometimes suffused with extreme vulnerability for the patient -- does not make for comfortable price haggling, experts say.

"The patient typically comes in with a lot less knowledge than the physician," said Lars Perner, PhD, an expert in consumer psychology who teaches at the University of Southern California's Marshall School of Business.

"It might almost seem a bit presumptuous if you're questioning the authority of the physician whose goodwill you need," he said.

The advent of managed care made some consumers aware of price -- the difference between in-network and out-of-network practitioners, for instance. But managed care also kept decision-making out of patients' hands, Dr. Sokolov said.

"People are embarrassed about potentially not following instructions," he said. "They don't want to look bad in the doctor's eyes. They don't want to look like they're not doing what their doctor suggests."

Although the U.S. has a uniquely competitive economy and consumers in general are comfortable asking about price, health care stands apart as a service that is sometimes seen as tacky -- even immoral -- to haggle over, Dr. Perner said.

"If you buy the wrong DVD player, and it does not work out, you're out a few hundred dollars," he said. "In a medical scenario, you make the wrong choice, you don't get the recovery you're looking for, [and] there may be complications that make you worse off."

There is also what Dr. Perner called a "self-esteem issue" -- you want to think you're worth whatever it will take to make you feel better. With a child or a dependent relative, you're even less likely to look for a bargain, or even ask questions that make it appear that you are.

Lack of information

There are other reasons, economic and technological, that consumer-directed health care is growing slower than some had expected.

For one, even if a patient does ask, for instance, how much she will be charged for a mammogram, her doctor might not know.

Maria Bennett, MD, a family physician at Baptist Health Center in Bessemer, Ala., said she doesn't mind talking about finances. But her patients enrolled in consumer-directed health plans sometimes want price information she doesn't have. "A lot of times we have to do detective work to find how much things cost."

And despite the efforts of many insurers, it's still difficult for consumers to find price information on their own.

"There are things that consumers probably would like to have access to in this market that the consumer-driven plans aren't quite giving to them," said Stephen Parente, PhD, associate professor at the University of Minnesota, who has studied consumer-directed health.

Cathy Tripp, national leader for consumerism at Watson Wyatt Worldwide, a corporate consulting firm, said the market was just beginning to try to meet the demand for useful, simple health care price information.

Tripp said not only are patients hesitant to talk about price with a doctor, but many lack the language to do so. "Half the population can't explain the term 'co-pay,' let alone 'HSA' [or] 'HRA.' "

Having price information available would help patients think of themselves as consumers, Tripp said. "I want to pull up the menu of the stuff I'm most likely to have done, for the routine 99% of what we consume at the doctor's office."

What will push acceptance?

Economists and health care analysts say the breakthrough for consumer-directed health plans is likely to come from a number of factors -- mostly economic, some generational.

"There's probably not one major thing that's going to do this," Dr. Parente said. He predicted that as baby boomers age and their parents' generation is gone, it will become more acceptable to question one's physician and to plan, research and price one's own health care.

Some analysts point out that managed care, like consumer-directed health plans, took off slowly, and the breakthrough was driven by economic factors -- namely, that managed care plans were cheaper than the alternatives.

San Francisco-based analyst Matthew Holt said a recession could be the driver for widespread adoption of consumer-directed health plans.

Unemployment is too low now for big companies to pull the rug out from under managed care and do "total replacement" with high-deductible plans and health spending accounts, he said.

About 5% of large employers surveyed this year by Watson Wyatt had made consumer-directed health plans the only health benefits option. Another 4% of the businesses surveyed planned to do so in 2008. But Holt said it would be small employers who would lead the charge into consumer-directed health.

"The way CDHPs are evolving and the way managed care plans evolved are not all that different," Dr. Sokolov said.