Honolulu Advertiser

SECOND OPINION  by Cliff Slater

January 16, 2006

Medical costs: Internet to the rescue

 Health care costs are still rising (see “Health care soon unaffordable” 2/18/02) and they will continue to do so for several reasons because of:

  • The increasing effectiveness of treatment and the public awareness of that.
  • The rapid changes in biomedical technology.
  • The increasing access to real information available online.
  • The change in age composition — older employees cost more. .

While employees incur these increasing health costs they are often not aware of their magnitude. All they see is the insurance paperwork; they do not have to lay out cash except for minor part of their health costs.

Employers have only so much money with which they can compensate employees and mandatory health plans have become a major cost. As employer-paid health costs increase, it tends to reduce the pay and other benefits that employees currently receive. Most employees do not realize that were health insurance not so high they could have more take home pay.

Most employees are also not aware that:

  • They indirectly subsidize other high-risk plan users (obese, smokers, high-risk sports) who raise plan costs.
  • They subsidize emergency room care for the indigent since no one goes without health care these days, insured or not. Nationally, this has resulted in health plans costing ten percent more than they would otherwise.
  • They pay for the extensive paper work needed by insurance companies, beyond what is medically necessary, which is very costly, and raises health plan costs.
  • Built into health plan costs is the high price of litigation both in court awards and the practice of "defensive medicine," which adds unnecessary and costly procedures to avoid lawsuits.[i]

It is well that we in Hawaii look at some of the trends in medical cost reduction on the Mainland to get a little perspective on what could be done here.

Health Savings Accounts (HSAs)[ii] are a major trend right now. Here’s how they work: You get a high-deductible policy from, say, Blue Cross for $86 monthly for a 40-year old non-smoking male opting for a $3,500 deductible policy.[iii]

You then open a Health Savings Account at, say, Wells Fargo, into which you may deposit up to $225 a month tax deductible. You pay by check for any medical expenses (except health plan premiums) during the year out of your HSA up to the amount of the deductible $3,500.

After that, your Blue Cross plan takes over. Any amounts you do not spend stay in the HSA and, for tax purposes, you treat just like an IRA.

Another new trend is the ability to shop for all different kinds of plans online. If you are in California, for example, you can shop extensively for medical plans with different costs and benefits and deductibles at ehealthinsurance.com

Once you have such a high deductible, it means your first $3,500 is cash out of pocket and suddenly you have an attitude change and find yourself shopping for health care.

Here are some new options:

On-line doctors such as Teladoc.com and Doctokr.com are springing up. Rather than charging the flat fee per visit for which the insurance companies traditionally reimburse them, they charge $15 cash for each five-minute block when on-line, and 50 percent more for an office visit. Patients apparently are far more focused on their specific illnesses during such visits and far less prone to time-wasting chitchat. For those occasions when you know the drug or physical therapy you need, the quick on-line email is very cost-effective.

Also available on the mainland are COD’s — cash only doctors[iv] — operating as many dentists do in Hawaii. Doctors pass along the considerable savings, from not having to prepare insurance paperwork and collect payments, to the patient. It also gives doctors more time to practice medicine.

Many doctors forming this new, but growing, trend are organized under the SimpleCare.com banner. Membership has grown to 22,000 patient members and 1,500 doctors. Some doctors reject all insurance and take only cash, while others continue to accept insurance while offering discounts of 15 percent to 50 percent for cash-paying patients.

Another trend is that of in-store nurse practitioners working, in Target stores and large pharmacies, for groups like minuteclinic.com. They say, “Our Certified Family Nurse Practitioners evaluate, diagnose and recommend treatments, including appropriate prescriptions for common family illnesses and are covered by most insurance plans.” And are open for extended hours and weekends

The world of medicine has been changing and it will continue. After all, we no longer expect doctors to make house calls, when not so many years ago that was the norm.

But few, or any, the foregoing choices are available to Hawaii residents because our legislators know better than we do what is good for us. Right.

Cliff Slater is a regular columnist whose footnoted columns are at www.cliffslater.com

[iii] Check your choices at: www.ehealthinsurance.com