Hospital usage rates decline as the system anticipates more people insured. Is this an unintended consequence of the ACA?

As for-profit hospitals released their first quarter earnings, many pointed to decreased hospital visits. I have seen estimates of decreased volume in the 3-4 percent range, and as high as 6 percent. This is certainly causing downward pressure on hospital revenue.

However, what I find curious is the reason hospital and health system executives give for the decreased volume.

The reason, they say, is patients are steering clear of hospitals and changing their usage patterns because employers are providing deductible health plans that are too high. The High Deductible Health Care Plans (HDHCP) that employers provide have the covered employee paying for the first portion of their care. Tenet’s CEO Trevor Fetter defines a HDHCP plan as one with a deductible of $1,200 or more. I think many of the HDHCPs are more likely at a $2,500 or $5,000 deductible.

In effect, they will no longer be concerned about the uninsured patient tallying a large bill that will never get paid. It is more the concern that the average American patient coming in and not paying their co-pay year over year. So now every average Joe that comes in is one of a multiplying liability to the hospital.

I heard a physician speak recently that begs the question of why is insurance needed for every healthcare interaction patients have. The analogy he used was how we pay to take care of our car and the difference between maintenance expense, warranty claims and insurance claims. The insinuation being if we paid cash for basic care it would make the providing of that care a much more rational market. This would be a market where a patient could call around various places and shop the cost of certain types of care and make a value judgment instead of having reduced choices because of coverage obligations that are then processed at great administrative costs.

I think these HDHCP are scaring our hospital leaders more and more, based off of their presentations and industry chatter. The concern is this will be a flood gate opening for uncompensated care. Do the math on a family with a household income of $50,000 with a $5,000 annual deductible. By time they pay taxes on their income, pay the mortgage/rent and buy food and clothes, you can certainly see how hard it would be for that family to pay the deductible year in year out. Our nation’s hospitals are planning accordingly.

In the future, as the ACA is enacted and reimbursement is based more on quality measurements and patient experience – not just volume – I hope we will see hospital usage reduce for the right reasons,   such as early disease detection thanks to better care coordination making for better discharges and overall improved health.