Direct Care Is The Vaccine For “Deductible Season”

In the fee-for-service world, like the real world, there is an annual cycle. And, of course, there are seasons.

You know “flu season,” “poison ivy season,” and maybe even “Lyme disease season”.

But there is also a season that has little to do with medicine and everything to do with a broken payment system.

“Deductible season” always starts on January 1.

Before, it lasted a couple of months, but it’s lasting longer than ever. This payment-related season, like “donut hole season” and “FSA spend down season,” has become more active in recent years, as employers and insurers implement measures designed to control costs and increase the patient’s stake in how their health care dollars are spent.

However, health insurance seems to operate under its own rationale. There’s a unique philosophical approach to this deductible. It might be less of a philosophy than some grueling acceptance. See, when it comes to health insurance, the analysis of premium saved versus out-of-pocket costs from the deductible doesn’t seem to resonate with many patients.

Compare this to auto insurance: Here we have an easier time dealing with deductibles for our automobile insurance. By driving safely, we can continually save money on premiums every year (the insurer knows we’re less prone to accident, statistically). In many cases, we even choose the highest possible deductible, knowing all the money we save each month is better kept in our pockets (we can spend it later, in case of an accident.)

As to the logic that having to manage a healthcare deductible of a thousand or more dollars makes people “prudent buyers,” maybe we should think again.

You know I’m a free market fanatic. And you know I believe that business and family medicine can go hand in hand, and achieve amazing outcomes (i.e. lower prices, better care).

However, the policy wonks and politicians assumed patients would take their high deductibles, and start questioning the need for tests, therefore pushing physicians to practice high value care. The wonks thought that shopping around for the best price would occur.

Maybe I’m a bit of wonk, because I was hoping this would happen, too.

However, there’s a major problem — price opacity. Some would like to shop around but are frustrated by the price opacity that still exists in laboratories, x-ray facilities, and physician offices.

Of course, I started a practice that offers price transparency. And I’m encouraging other docs to the do the same.

But there are patients out there who are still paying whatever they are charged.

Some don’t pay. And, sadly, this means there are the patients who don’t get their recommended testing and consultations. All because of the deductible.

Interestingly, even those who have funds deposited into a health savings or similar account by their employer or through voluntary payroll deduction sometimes balk at spending that money to pay for services.

It used to be that deductible season lasted a couple of months at the start of the calendar year, but now with the much higher deductibles, it can extend several months if not longer.

And, as we’d expect, the end of the year, especially the last few weeks, gets really “exciting” for a couple of reasons.

One is the imminent resetting of patients’ yearly deductibles.

The other is patient realization that their tax protected health savings accounts have either “use it or lose it” provisions or limited rollovers from year to year.

Because of both phenomena, patients decide, sometimes at the last minute, to take care of tests and procedures that were put off earlier in the year before the end of the year.

That is not always so easy, given the challenges of scheduling an increased volume of patients during the holiday season.

And when patients delay or defer recommended testing and treatment, it can result in harm.

Second, this increases the stress that an office staff will face. No matter how lean of a practice you’re running, if you get ALL of your patients trying to come in at the same time, you’re going to have problems.

And in the case of deductible season, a fee-for-service practice will face cash flow issues.

As if doctors needed anything else to stress about.