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Member Research & Reports

Member Research & Reports

Michigan: One Size Should Not Fit All When it Comes to Our Out-of-Pocket Health Care Costs

If you have tried to see a doctor, fill a prescription or get a diagnostic test lately, you have probably had to pay more out of your own pocket than you would have even a few years ago. Most insurance plans have increased their co-pays and deductibles, to keep monthly premiums from rising even faster.

But a pair of experts who have studied this trend see a lost opportunity to give you – and all health care consumers — the right incentives to use the services that are most likely to improve your health.

[Photo: Dr. A.Mark Fendrick]

Rather than charging all patients the same amount for every doctor visit, diagnostic test, and prescription drug, out-of-pocket costs should be based on how much a specific clinical service improves health, say Dr. Mark Fendrick of the University of Michigan School of Public Health and Dr. Michael Chernew of Harvard University.

In a new JAMA article, they lay out key steps that public and private insurance providers could take to alter consumer cost-sharing from ‘one-size-fits-all’ to a more ‘clinically nuanced’ model, based on individual patient and provider factors.

Their piece, commissioned by the National Academy of Medicine as part of its Vital Directions effort to lay out a framework for future health care reforms, appears alongside 18 others by other top-tier health care experts from around the country.

Dr. Fendrick, a professor in U-M’s School of Public Health and Medical School, and Dr. Chernew, a professor at Harvard Medical School, have worked for more than a decade to advance a concept they developed, known as value-based insurance design, or V-BID.

They have documented that when people are asked to pay more for medical care, they often skip or skimp on the clinician visits, diagnostic tests and treatments they need to stay healthy. And that skipping of recommended care can adversely affect health, worsen health disparities, and in some cases, increase total spending.

Their JAMA piece points to specific changes to encourage value-based cost-sharing. They propose:

“Increasing health care spending has created serious challenges for purchasers in the U.S. health care system. Solutions will require both payment reform and greater patient engagement,” the authors write. “Patient-facing tools should not create barriers to access, but instead encourage people to use high-value services from high-value health professionals and health care organizations.”

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