The Ins & Outs of U.S. Healthcare Consumerism in the 21st Century

Note: This is the first in a series of “healthcare consumerism” posts meant to inform & educate the reader about the U.S. healthcare system.

 

Imagine a U.S. healthcare system where everyone is an informed, savvy consumer of medical services and plays an active role in purchasing and consuming those services.

Sounds amazing, right?

But we live in the real world, and reality paints a different picture of healthcare consumerism.

Did you know that many Americans spend less time researching and selecting health coverage options than a computer, television, or car?  Silly as that sounds, what happens when a selection that only took you 30 minutes (or less) to decide during “Open Enrollment” ends up costing you thousands of dollars or possibly your health?

Or imagine getting an expensive medical bill in the mail despite having insurance.  Think it can’t happen to you?  Just ask:

There are countless other stories of average Americans with extraordinarily shocking experiences with our healthcare system.

Does this mean healthcare consumerism is a pipedream?

Absolutely not.

Healthcare consumerism, at its core, is where literacy and transparency meet, and has been around for years.

Ever see those SingleCare prescription drug ads on TV?

Yup…healthcare consumerism.

Getting your annual physical – healthcare consumerism.

Even selecting a health plan is healthcare consumerism.  While some people may choose to make quick health benefit decisions, there are others who do spend the time figuring out which plans make the most sense for them and their loved ones.

Thanks to the pandemic, healthcare consumerism evolved rapidly, forever altering our healthcare system.  Look no further than telehealth & mental health services.  Although they were available pre-COVID, prolonged isolation and disruptions to everyday life accelerated their necessity, adoption, growth, and innovation.

Meanwhile, federal legislation passed within the last few years will bring about sweeping changes to our healthcare system on par with the Affordable Care Act that will provide substantial consumer protections for years to come.

Add in a digitally connected world and you have a recipe for consumer success.

But success won’t happen overnight. It’ll require some time, a bit of resourcefulness, access to information, and your participation – all the hallmarks of literacy and transparency – to be an informed, savvy healthcare consumer in the 21st century.

Literacy

Health literacy is “the degree to which an individual has the capacity to obtain, communicate, process, and understand basic health information and services to make appropriate health decisions.”  Yet, more than a third of American adults have low health literacy thanks, in part, to a complex healthcare system.  Navigating it does require certain skills:

  • Math (e.g., out-of-pocket expenses)
  • Reading (e.g., medical brochures)
  • Writing (e.g., insurance forms)
  • Communication (e.g., with your doctor & clinical staff)
  • Technology (e.g., health & wellness apps)

Americans tend to struggle with math the most.

Pop quiz: You go to the hospital after a minor accident. The hospital bill is $3,000. Your health plan has the following coverage benefits: 80/20 coinsurance, $50 copay, $1,000 deductible.  What were your total hospital expenses?

If you’re unsure – you’re not alone (answer appears at the end of this post).  Most Americans can’t correctly define basic insurance terms like a “deductible” and “out-of-pocket maximum” – the very costs they’re responsible for paying – let alone how they’re applied when seeking care.

Health illiteracy leads to:

  • Higher rates of hospitalization
  • Frequent trips to the emergency room
  • Poorer health

This cumulative effect costs billions of dollars annually and puts undue financial stress on individuals and families.  All this points to an undeniable truth: health literacy is a form of financial literacy.  If people can be educated and empowered to act on increased financial knowledge, then improving their sense of health literacy & awareness should also be emphasized.

And it all starts by learning the “basics”:

  • Coinsurance
  • Copay
  • Deductible
  • Out-of-pocket maximum

If you can grasp these financial concepts, then you’re well on your way to becoming a better healthcare consumer.  Here are just a few additional tips to help you on your path:

  • Beware the “surprise bill” when receiving care by an out-of-network provider at an in-network facility.
  • Billing errors are typically the rule not the exception – REVIEW your bills!
  • “Shoppable” medical care is real – transparency is key.

Transparency

Being a consumer today has never been easier.  Information is literally at our fingertips!  Retail, travel & other industries have adopted transparent pricing and expect – and even assist – their customers to shop for the best value.

Except healthcare.  Patients don’t typically know what they will pay until AFTER treatment occurs.  Can you imagine Southwest Airlines telling you the price of airfare AFTER you fly?!  Ridiculous.

That is going to change.

The federal government took important steps toward creating price competition in the healthcare marketplace by enacting two landmark rules:

While a paradigm-shifting moment in the healthcare industry, their full effect will likely not be felt for several years.  Until then, consumers can rest assured that they can shop around for medical care today.

Tip #1: If a medical service can be scheduled ahead of time, usually on an outpatient basis (i.e., no hospital stay required), then it is a “shoppable” service.

  • Numerous tests and procedures fit that definition – lab tests (e.g., cholesterol check), MRIs, colonoscopies, mammograms, to name a few.
  • Moreover, prices for a shoppable procedure or test can vary significantly among medical facilities.  The cost of a knee surgery, for instance, can vary by several thousands of dollars between facilities located (literally) across the street from each other!

Tip #2: Research and compare prices.

  • Check your insurance company’s website, or call your insurer, to get an estimate of the cost of your test or procedure.
  • Use reputable third-party price comparison tools (e.g., MD Save and ClearHealthCosts) to uncover possible cost savings (e.g., discounted cash payments).

Conclusion

I hope these lessons will help you on your journey to becoming a better healthcare consumer and, ultimately, living a healthier life in these unprecedented times.

Answer: $1,440

Leave a Comment

Your email address will not be published. Required fields are marked *