The United States Department of Health and Human Services released a report advertising that the national rate of uninsured has reached an all-time low of 8% with only 26.4 million Americans still out of coverage. It sounds like good news, but a deeper dive shows a huge shift from private to taxpayer-funded government-subsidized coverage, which has a lackluster history of curbing healthcare spending and good healthcare outcomes.
Thanks to the pandemic and the American Rescue Plan Act, Medicaid enrollments increased with 24 million new enrollees as states were unable to remove people who no longer qualify and another two million opted for plans. ObamaCare exchange.
It is important to remember that having an insurance card is not the same as having access to care. And the incentives for traditional health insurance plans aren’t meant to reduce the cost of long-term health care. As a result, innovative companies are emerging that are introducing new ways to both contain healthcare spending and ensure positive outcomes.
America must encourage patients to be smart health care consumers. We need communities that harness their combined consumer power to get better business. Crowdfunding offers a potential solution that can do just that.
Traditional health insurance doesn’t work like any other type of insurance. Auto and life insurance are designed to compensate a policyholder in the event of an unlikely event such as a car accident or unexpected death. Conversely, health insurance often pays the first dollar for routine and preventative services, as well as more expensive catastrophic treatments.
Health care prices have become so out of the way that most patients want a third-party health insurance plan to pay for the basics like a prescription or lab test. Essentially, when Americans opt for a traditional health plan, they prepay their health care expense to an intermediary to pay an even greater amount of money to providers, which is collected in the form of higher premiums the following year. The economy just spurs health care price inflation.
American annual healthcare spending eclipsed $ 4.1 trillion, with the government spending most of that. The nation is on this unsustainable path because patients have no incentive to shop at a price and instead have to trust insurers to negotiate prices.
The sad reality is that traditional insurers don’t always contract rates. They face their own set of perverse incentives created by the Affordable Care Act (ACA). Under the ACA, insurers can keep more money when more is spent, so if prices or premiums rise, the cost falls to patients or employers, not insurers.
If traditional health coverage, in the private sector or in the government, does not contain health expenditure, what can it do? Fortunately, there’s a new company breaking away from old-school health coverage and helping uninsured patients pay cheaper medical bills — their name, CrowdHealth.
CrowdHealth’s success begins with helping patients make direct cash payments to providers. Members pay a monthly contribution to their personal “Generosity Accounts”. When members need treatment, care coordinators scour the country for the right doctor, best facility, and negotiate the cash price with the provider. Then the coordinators crowdfund the resources to pay for the procedure.
A patient in Wisconsin suffered from supraventricular tachycardia, a heart condition that needed corrective procedure. His local hospital fetched $ 83,655, but a care coordinator found a superior quality provider for a much lower price in Oklahoma City. CrowdHealth secured funding and covered the first-class airfare and three-night stay in one of the most beautiful hotels in the city. The final bill, including travel expenses, was approximately $ 30,000, more than $ 53,000 less than her local hospital would have charged for the procedure.
Doctors love to be paid in cash because they can skip the administrative costs of filing an insurance claim, argue over previous clearances, and often wait 90 or 120 days to get paid. These administrative costs can take up to 25% of the final medical bill.
Crowdfunding is a game changer because it can encourage those skipping care now for cost reasons to seek the care they need. Avoiding wasteful overspending when seeking care can lower the price of health care for everyone.
The nation needs more innovators like CrowdHealth who can bring patients together in one community to secure better rates and offer an alternative to traditional unaffordable health insurance. States can further help patients and innovators by streamlining recent federal rules to require all providers, regardless of setup, to share their direct cash rates. Crowdfunding may not be for everyone, but healthcare spending will decrease once patients are equipped with the right tools to make shopping a painless process.
Josh Archambault (@josharchambault) is the founder of President’s Lane Consulting and Senior Fellow at the Cicero Institute (@ Cicero Institute) and Pioneer Institute (@Pioneer Boston). Follow him Twitter or LinkedIn.