Many chronically ill patients who would benefit from a medium-coverage health insurance plan and preventative care are instead choosing comprehensive insurance plans, researchers say.
Many patients with chronic illness are choosing a pound of cure over an ounce of prevention and driving up medical costs in the process, according to findings in a study examining health insurance choices as they correlate to costs.
"Our results indicate that there exists a sizable segment of consumers who purchase more comprehensive plans than needed because of high uncertainty vis-à-vis their health status, and that once in the plan, they opt for curative care even when their illness could be managed through preventive care," the study says.
When Evidence Says No, But Doctors Say Yes
Chronic medical conditions such as heart disease, cancer, hypertension, respiratory diseases, diabetes, Alzheimer's disease, and kidney disease account for 75% of healthcare expenditures in the United States.
Individuals with chronic diseases can consume three types of healthcare services:
- Secondary preventive care, which includes diagnostic tests
- Primary preventive care, which includes drugs that help prevent progression of a disease
- Curative care, which includes surgeries and expensive drugs that boost a patient's health
After analyzing three years of data from a health insurer that offered basic, medium, and comprehensive coverage Preferred Provider Organization plans to customers through their employers, researchers found that of the 3,000 people whose data was analyzed, about 14% would have been good matches for a medium coverage plan and preventive care, but they elected the more costly comprehensive plans and curative care instead.
A 'Moral Hazard'
Going from basic, to medium, to comprehensive, the annual premium increased. But the deductible, co-insurance rate, and out-of-pocket maximum decreased.
Johns Hopkins University researcher Jian Ni, PhD, an associate professor in the Johns Hopkins Carey Business School is one of the study's authors.
How Real is Healthcare Consumerism?
In a news release, he called this escalation a "moral hazard." The individual doesn't mind choosing a more costly, but unnecessary plan, because he or she knows the insurer will pay for the bulk of it.
"Certainly some people with more serious conditions will benefit from a comprehensive plan and curative care, but the 14% in our study pose the kind of moral hazard that contributes to health care expenses in the U.S. that are higher than they probably should be, roughly a fifth of gross domestic product," Ni, said in the statement.
The study authors suggest that if physicians and insurers provide consumers with clearer instruction and guidance individuals would be more likely to select a health care plan that better fit their health status which would help contain costs to consumers and insurers.
Jennifer Thew, RN, is the senior nursing editor at HealthLeaders.