I have a story to share about the problem controlling healthcare cost.

Yesterday, I received a call from my son’s school nurse telling me that he had been accidentally kicked in the face during PE class. She was worried that he might have broken his nose and might have a concussion.

So on the way to pick him up, I called his pediatrician. I spoke to the front desk and explained the situation. Her response was that their office couldn’t do anything for him and I should take him to the emergency room and have them take an x-ray and do an MRI.

We have a high-deductible health plan (HDHP) so healthcare expenses get paid out-of-pocket first until we reach a pretty high deductible (a couple of thousand dollars). My guess is that these procedures plus an ER visit would have cost us $1500 at least.

To be honest, I felt like the advice seemed a little overkill. I guess she could sense my apprehension and asked if I wanted the doctor to call me back later. Of course, I said yes.

 

Conflicting Advice from the Doctor and His Office

Then I went to pick up my son. He looked a little shaky. His nose was swollen. He had a headache. The nurse gave me a pamphlet outlining how I should take care of him. It was mostly about resting and avoiding any strenuous activity – seems pretty obvious.

Later in the day, I heard back from the pediatrician. He listened to me and then said that while he might have a minor concussion, there’s not much that they would do other than what it described on the care pamphlet. And if he happened to have a broken nose, again there wasn’t much they would do until the swelling went down. At that point, they could decide if he needed surgery to straighten it out.

When I mentioned that his office had told me earlier that I should go to the ER and have an x-ray and MRI, he said that wasn’t necessary for the reasons mentioned above.

My problem with this whole encounter is had I followed the advice given to me by my pediatrician’s office when I first called them, I would have spent a large amount of money for something that wouldn’t have helped my son and that the pediatrician himself later said we didn’t need.

 

Do High Deductible Health Plans Control Healthcare Cost?

Maybe I am more sensitive to this because I have a HDHP. For those not familiar, the HDHPs were created a number of years ago. They were touted as a way to control the ever-escalating healthcare cost problem by putting the consumer in more control and having greater responsibility for spending money on healthcare services. The plans still provide coverage for catastrophic care (i.e., major illness, car accident, etc.) and they typically pay for preventative care. But for everything in between, the consumer pays for the care themselves.

Employers have embraced these plans primarily because the premiums are significantly less than premiums for PPOs and HMOs. And in fact, the premiums are so low, many employers also provide $1000 to help cover the cost of the high deductible.

In that we have a HDHP and because I have been in healthcare finance for a long time, I have learned to be skeptical and question things when it comes to healthcare cost. But for the average person on a PPO, their out-of-pocket costs for all the recommended care might be $100. And not that my child isn’t worth the $1500 it would have cost me, but if the fee was only going to be $100, I very well might have gone ahead.

 

The Cost of Healthcare Has Little Bearing in the Decision Process

But this is the problem. The cost to do an MRI and an x-ray probably isn’t $1500 but it’s not $100 either. They are expensive machines run by highly trained medical staff and there’s a cost for that. And due to litigation concerns and being overworked, some in the medical community seem to have an initial reaction to overtreat everything.

It’s much better to order a test that is later determined to be unnecessary than to not order a test that is later determined should have been ordered.

The HDHPs are bringing patients more into the healthcare cost loop. With an HDHP, patients have economic skin in the game, at least up to a certain level. But until medical professionals start thinking in terms of cost / benefit, I’m not sure we’re going to see any improvements in the healthcare cost problem.

And by the way, it turns out my son is just fine. A little very mild bruising is all. Nothing unusual in the life of a kid.

 

What do you think? How do we incorporate cost/benefit reasoning into healthcare decisions which are so personal by their very nature?

 

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