Consumer-Directed Health Care: Can Engaged Patients Transform Our Health System?

By Joanne Conroy, MD

brainstormsProponents of consumer-directed health plans argue that insured people aren’t really aware of the costs of care. Usually, their out-of-pocket costs are limited to 25 percent of premium costs in employer-sponsored plans, deductibles, and co-pays. But if you had to pay for services with funds from a high-deductible savings account, would you become a better shopper? Would you research your health care decisions with quality and value in mind? Proponents of consumer-directed plans say this would reduce unnecessary health care spending and overall costs for all of us.

The American Board of Internal Medicine, the National Physicians Alliance, Consumer Reports, and multiple other physician specialty societies have launched a campaign called Choosing Wisely. The campaign’s goal is to help start a dialogue between physicians, patients, and other stakeholders on the overuse of health care resources in the United States. The hope is that pairing economic motivation with consumer knowledge will result in market competition that drives providers, insurers, and employers to improve health care value.

Easier said than done. Current tools do not help consumers make complicated health decisions. Obstacles include varying degrees of health literacy and the availability and transparency of cost and quality information.

Take hearing aids, for example. 36 million Americans have age-related hearing loss. The hearing aid market is estimated at $6 billion globally, with US sales accounting for 40 percent of the total.

Hearing aids are expensive, typically a few thousand dollars, sometimes much more. Most insurance plans don’t cover the cost—or not much of it—although they do cover a hearing evaluation. Medicare generally doesn’t pay anything, although hearing loss affects many of its beneficiaries.

There are some low-cost devices on the market, but the traditional hearing aid costs between $5,000 and $8,000. Of this cost, about $1,000 is for manufacturer’s cost and profit margin, $1,000 for the audiologist’s time, and the rest to cover sales and distribution. Significant enough that in January 2012, United Healthcare launched a national program called “hi: HealthInnovations” that promises to provide its own brand of hearing aids to the company’s insured.

Consumer Reports published a survey in 2009 that found that all types of professionals made mistakes in fitting the aids purchased by shoppers. In about two-thirds of fittings, patients ended up with incorrect amplification. Less than half of shoppers were offered a choice of hearing-aid style. In loud social settings (the most challenging environment for hearing-aid users), survey participants reported more improvement with those aids that do not use ear molds: custom-shaped inserts that fit tightly in the ear canal.

All of this mirrors my mother’s experience. I had a fast-track education in hearing aids when my 88-year-old mother began to have greater difficulty understanding conversations after 15 years of hearing aid use. She went to a “nice” local audiologist in a small southern city. She was fitted with an “off-brand” hearing aid, for which she paid $7,000 and was constantly returning because of fit or function problems.

When I learned that Medicare had approved her for a cochlear implant (at age 88!), we went in search of a better solution. We ended up at the Starkey Center for Hearing Excellence in Edina, Minneapolis. There my mom was tested and fitted in one day with state-of-the-art wireless hearing aids. They have directional microphones and four different settings for normal conversations, noisy environments, lectures/plays, and a setting to stream the TV audio directly into her hearing aid. The whole process cost us $5,200. The customer service, the family education, and the experience were all outstanding. Her hearing is far better, and we are more educated consumers.

The hearing aid market is a perfect example of a consumer-directed marketplace, yet consumers have not become better shoppers for quality and value. If we want to implement Health Care Reform 2.0—putting patients in the driver’s seat—we have a lot of work to do to provide cost and quality data. The question is, will we have a different outcome when professionals are advisors in the process to counsel patients, but also have a financial interest in the decision? This is the challenge of free-market medicine.

Dr  Joanne Conroy MD—Joanne Conroy, MD, is Chief Health Care Officer at the Association of American Medical Colleges. She can be reached at jconroy@aamc.org or @joanneconroymd.

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0 Responses to Consumer-Directed Health Care: Can Engaged Patients Transform Our Health System?

  1. James E. Lewis, Ph.D. says:

    Dr. Conroy never fails to say something interesting as well as useful and has done it again in her first Wing of Zock column. Personal experience with a 93-year old mother-in-law with impaired hearing supports Dr. Conroy’s argument.

    Some additional points may encourage others to comment:

    1. Starkey is one of the major manufacturers of hearing devices. They obviously have a vested interest in doing right by their customers. If you don’t have that information or are a usual patient frustrated by a poorly fitted and functioning hearing device, you can waste a lot of time and money with a local hearing aid “expert” and get no satisfaction. Going directly to Starkey seems to yield positive results similar to those experienced by Dr. Conroy much more quickly and less expensively.

    2. Shopping for a hearing aid is more akin to shopping for prescription drugs than for joint replacement surgery, cancer diagnosis and treatment and care among a hundred other disease-specific conditions, or even which hospital may actually provide, not just promise, excellent care–while not mentioning the physicians on its medical staff who will actually admit the patient and develop, execute, and oversee the treatment plan. In my view, it is unrealistic to expect the usual, relatively low-information patient and his/her family to “shop,” often in a time of distress and emotional turmoil, for the quality and cost-effective care that they (and all of us) have a right to expect from licensed and accredited medical professionals and institutions.

    James E. Lewis, PhD

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