High Deductible Health Plans (HDHPs) are rapidly becoming the plan of choice and even the sole offering for some employers according to the 2014 Employer Benefit Survey from the Kaiser Family Foundation Foundation/Health Research and Educational Trust (HRET).1 While this helps control premium costs for employers, the impact of employers shifting to offer HDHPs is being felt deeply by employees--in higher out-of-pocket costs and, consequently, in their overall health.
A 2014 Journal of Health Affairs study reviewed four years of data for more than 10 million workers and concluded that while corporate health spending growth fell, one-fifth was attributed to steeper out-of-pocket costs for their employees. In other words, costs shifted from employers to employees. President of the Kaiser Family Foundation, Drew Altman, noted in a WSJ article: “There has been a steady increase in deductibles and the main effect is to reduce use.”
And reduce use, they have:
One in three Americans reported delaying medical care for their family because of cost, according to a 2014 Gallup poll.4
Reduced healthcare utilization has major implications for long-term health of employees and the corresponding healthcare costs. When employees delay treatment for fear of high, out-of-pocket costs, they and their employers often spend more money in the long run. If treatment is foregone or delayed, a routine urinary tract infection could permanently impact kidney function and require chronic management. Strep throat untreated can damage the heart (rheumatic fever) or kidneys (pyelonephritis). A rash symptomatic of Lyme disease not diagnosed early can lead to serious complications. Skipping some simple, inexpensive treatments can impact the long-term health of employees and cost employees and employers thousands of dollars.
In addition to the hard costs associated with delaying necessary care, there are also the soft costs, the biggest of which is lost productivity. Missing work due to prolonged and more serious illnesses has a real impact on an employer’s bottom line in delayed deliverables, lower capacity, and/or additional labor costs incurred from temporary replacements.
To help offset employees’ out-of-pocket costs and get employees treatment before a simple illness becomes a complicated one, companies are turning to telemedicine. In fact, Truven Health Analytics reports that more than 70% of the issues that would normally land someone in an ER or urgent care center can be effectively diagnosed and treated through a short phone consultation with a physician.5 Running parallel to the growth of HDHPs is the growth of providing 24/7 healthcare via telephone as a benefit to employees.
For telemedicine to be an effective solution to delaying care, and for employees to seek treatment when they need it, the plan must cost the employee nothing. If there is a cost to employees, they will treat it the same way as physically going to the doctor—they won’t do it. When employees pay absolutely nothing to talk to a doctor and get treatment on the phone, they get the treatment when they need it--before their condition worsens. Zero cost to employees means heavy use by employees. Effective telemedicine services obtain utilization rates well above 40%.
With the unrelenting increases in medical insurance premiums, the increased adoption of HDHPs by employers is understandable and not surprising. Telemedicine helps combat the negative, unintended consequences of HDHPs. When employees get immediate access to a doctor for everyday health issues (e.g., infections, allergies, colds, flu, rashes, etc.), they keep their money in their wallet, and avoid escalating and costly health issues. When employers have a critical mass of employees using telemedicine as a First Stop for their minor illnesses and injuries, they improve their employees’ health and increase overall productivity. A telemedicine benefit leads to a healthier workforce, even in a world of high deductibles.