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Patients Cutting Health Care Usage

Higher Costs Force Workers To Make Difficult Decisions
By Mark Schwanhausser
San Jose Mercury News - November 21, 2004

Note: Scholars from TCI Conferences comment - USC's Glenn Melnick and RAND's Dana Goldman
A nationwide push to make workers bear a bigger share of their rising medical bills is spurring Americans to do what their employers had hoped: spend less on drugs, cut down on doctor's visits and shop more smartly for less expensive care.

But this prescription for the ailing health care system also has produced some unexpected side effects. Many workers are making concessions at the doctor's office, at work and at home that could compromise their health, happiness and financial security.

Some are postponing doctor's visits until their symptoms are serious. Some are stretching drug prescriptions -- or not taking the drugs at all. Some are staying in jobs they hate because they're desperate to keep their health insurance. And with medical bills rising far faster than paychecks, some are saving less for retirement.

``This is just the beginning of a long-term trend that is only going to intensify,'' said Glenn Melnick, a health policy professor at the University of Southern California. ``This is a wake-up call for those who haven't heard the bell ring yet -- or a pep talk for those who have. . . . People will have to learn to budget for health care decisions in a way they never had to before.''

The idea behind this movement is to get patients to think more with their wallet -- and use their tremendous collective power as consumers to drive down health care costs. The hope is that insurers could charge lower insurance premiums -- which have risen at a double-digit rate four consecutive years -- if enough Americans use less or cheaper health care.

To prod that behavior, employers and their insurance providers increasingly are levying higher ``co-payments'' to see a doctor or buy drugs, requiring workers to use less expensive generic drugs and limiting the drugs they'll pay for. Many also are dangling price breaks to induce patients to order drugs through mail-order pharmacies.

Cost inquiries

It's working, according to a survey by the Employee Benefits Research Institute released this month. More than eight out of 10 workers are buying less-expensive generic drugs. Three out of four are trying to take better care of themselves. And nearly six out of 10 workers are grilling their doctors more about the cost of their treatment.

The allure of lower-priced generic drugs appeals to Curt Weil, a financial planner in Palo Alto who describes himself as ``thrifty.'' After decades of taking a brand-name thyroid drug, a couple years ago he asked his doctor if there was any generic drug that would work as well. There was, and he switched to a generic that costs far less.

``Why not save the money?'' Weil said.

But as medical costs gobble ever-larger bites out of stagnant American paychecks, the Employee Benefits Research Institute survey shows there are troubling unintended consequences, too:
• Nearly six out of 10 workers say they are avoiding their doctors until they experience serious symptoms -- a decision that could lead to costly bills that could have been avoided with preventive care.

• One-fourth of Americans are so fearful of losing health insurance that they admit they are trapped by ``job lock'' -- passing up a job opportunity, staying at a job they don't want, or postponing retirement.

• One in four workers say escalating medical bills have forced them to save less for retirement, and almost half are saving less overall.
 
Add it all up and you have a lot of stewing workers who need a dose of financial pain relief. Almost three out of 10 workers said they were ``not at all satisfied'' with the cost of health care that their insurance doesn't cover, up from 20 percent in 1998.

To weigh the trade-offs of this movement, consider the impact of raising the co-payments that workers shell out to fill prescriptions. One goal is to break people of the habit of demanding pricey brand-name drugs they've read about in advertisements and steer them toward generic drugs that are just as effective at a fraction of the cost.

Spending plunges

When 30 companies doubled the co-payment for a half-million workers, spending on eight types of drugs plunged 19 to 33 percent from 1997 through 2000, according to a study in the Journal of the American Medical Association in May. Patients were especially frugal with drugs that treat allergies, arthritis and other intermittent maladies. For example, the use of allergy and non-steroidal anti-inflammatory drugs dropped nearly in half.

There were worrisome signs, however, that patients with chronic conditions cut back drug use by 8 to 23 percent. Researchers estimated that raising the co-payments led to a 17 percent increase in emergency room visits and a 10 percent increase in hospital visits for patients suffering from diabetes, asthma and gastric disorders.

``We're in the middle of a giant social experiment,'' said Dana Goldman, a co-author of the study and director of health economics for the Rand think tank in Santa Monica. ``Co-payments are a very blunt tool for changing health. For some people, raising them is OK, and it just makes them more prudent buyers. For other people, we really worry about adverse health consequences. We have to monitor these plans and see what's happening as people make choices.''

Price sensitivity is increasingly an issue for patients, said Dr. David Sobel, a director of patient education and health promotion for Kaiser Permanente. For example, he worries that more patients are taking only half-doses to stretch their prescriptions.

Risk of stroke cut

Kaiser also has launched a program to identify patients who are at higher risk of heart attack and stroke. By putting patients on a daily regimen of four drugs, Kaiser estimates it can cut their risk of stroke in half -- and save everyone the cost of emergency care, physical therapy and more.

But because many of these at-risk patients don't yet feel any symptoms, money sometimes becomes a factor, Sobel said. With a $20 co-pay, Kaiser patients would pay about $60 a month for a combination of aspirin, statin, beta blockers and ACE inhibitors. Patients who don't have such coverage and had to pay retail prices could spend from about $115 for generic drugs to $280 for brand-name prescriptions, a Kaiser spokesman said.

Sobel says it used to be that patients would say they hadn't taken their medication because they'd forgotten, were in denial that they had a disease or were suffering unpleasant side effects. Now, drug costs are on that list.

``Increasingly, conversations are coming up and we're asking, `Can you afford that medication?' '' Sobel said.

Contact Mark Schwanhausser at mschwanhausser@mercurynews.com or (408) 920-5543.