Too often, employers assume that employees with health insurance are protected against the financial ravages of illness. Add to that a decent salary and owning a home, and most will conclude that such an employee is well-positioned to handle unexpected illness.
These notions are incorrect, as we’ve learned from Margo Sanger-Katz’s engaging article in the New York Times that examined the extended financial hardship experienced by almost 1500 people who were seriously ill. Illness had a profound impact on the social, professional and financial well-being of those afflicted. Having a job and health insurance are not antidotes to this financial hardship.
But what that article could not explore was the run-up to the illness those people experienced and how much financial barriers to care may have led to missed opportunities for early intervention. Yes, not all illness can be prevented. There will always be cancers that miss early detection, unavoidable injuries and premature babies that lead to huge medical bills.
Even the healthy are regularly at risk. We know that the average American family will struggle to cover a $2000 bill and yet the average family deductible is almost $8000. Arithmetic alone tells us that the average family is one serious illness or major operation from catastrophe.
While the Times calls this financial toxicity, we call it health care uncertainty and insecurity. The cause is in plain sight: the fantastic increase in healthcare costs since 2000 over the last two decades. And the root cause of those cost increases is overwhelmingly due to increases in prices. Changes in health insurance–high deductible, more copays–have passed those increases on to the sick and increasingly to the not-yet-sick (persons at risk for severe illness who lack the means for early intervention).
America’s consumerism experiment of pushing more costs to patients to assure they have skin-in-the-game is failing. We thought that consumerism would be an foil to rising prices. Consumerism requires transparency, something sorely lacking in healthcare. Consumers aren’t choosing where to buy; they are choosing whether to buy, and good studies have shown they are often choosing not to buy essential care.
The Zero Card changes the equation. The premise behind The Zero Card is simple: contract directly with providers who offer lower market-based prices (based on their own costs and desired margin) for bundled procedures and share the savings between employer and employee. Use the employee portion of the savings to make the employee’s cost $0, creating a new incentive to access Zero Card providers while removing financially toxic deductible and copay barriers to care.
This paradigm can work for any medical services that can be scheduled. Zero Card bundled services cover a vast range of procedures from blood draws to bunion corrections to bypass operations, all at overall savings of 35-45%. The concept isn’t just for surgeries or other “drive-by” services. It can work for chronic illnesses as well.
An example: We know that 30% of major cardiovascular events occur in persons with diabetes. We know that on average a person with diabetes incurs over twice the costs of someone without diabetes. The opportunity for intervention and future cost (and hardship) avoidance is huge. Yet we put deductibles and copays that make no sense at all between those persons and the care we tell them is essential: two to four physician visits a year, up to 4 lab visits, an eye visit and a foot exam visit.
What we see are persons with diabetes skipping visits, not getting testing done and cutting back on medication. So we worked with one well-known provider to bundle a year’s worth of diabetes care at a fair price with $0 copay and deductible to the employee. We took cost out as a barrier to motivating patients to get the care they need.
We frame all our transformative activities around these two principles: If you can schedule it, you can bundle it. Price increase alone accounts for most of the increases in healthcare costs. With price as the main culprit, lower prices are the most direct route to lower costs.