Jeffrey Vacirca, MD
The growing popularity of high-deductible health insurance plans has created a range of increasing pressures on oncologists and hematologists. According to doctors and administrators at a number of practices, more and more patients find themselves unable to afford their deductibles, payment plans are routinely extended by years, bad debt and write-offs of losses are ubiquitous, practices must hire additional financial counselors and business staff, and patients are more dependent on financial assistance programs.
High-deductible plans, which require larger out-of-pocket spending by patients, are becoming more prevalent in part because of the insurance mandate and coverage requirements of the Affordable Care Act (ACA). Both employers and people buying individual insurance on the state and federal health exchanges have responded to rising costs by choosing plans with the lowest monthly premiums, which typically come with annual deductibles of a few thousand dollars that patients pay up front before their treatment begins.
At North Shore Hematology Oncology Associates in New York, bad debt now amounts to “hundreds of thousands of dollars per year,” said Jeff Vacirca, MD, the practice’s CEO and vice president of the Community Oncology Alliance. “It’s gone up 10-fold in the past decade. I probably get a half a dozen letters a week from patients who can’t afford their care and don’t know what to do.”
“Obviously, the first thing we do is call them and say, ‘We’ll take care of it, we’re going to work something out. The last thing we want is for you not to get treated,’” said Vacirca. “But in the end it’s a tough burden to carry. Doctors are having trouble staying in business.”A New Norm in Insurance
High-deductible health plans, or HDHPs, were for years found mostly in the small market for individual insurance. They grew more common as rising medical costs led insurers to boost premiums in both individual and group plans, and became a new norm when the health exchange expanded the individual market. The law’s benefit requirements further pressured insurers’ bottom lines, accelerating the trend.
The number of Americans using HDHPs has risen about 15% a year since 2011, according to survey results announced last July by the insurance industry trade association America’s Health Insurance Plans.1
Of the 17.4 million people enrolled in those high-deductible plans in January 2014, 74% were in large group plans.
“I understood going into this that we were going to be dealing with a lot more patients getting high-deductible plans. But what I didn’t take into account was the fact that so many employers would be switching over to these plans, including even hospitals,” said Ricky Newton, director of financial services and operations for the Community Oncology Alliance in Washington, DC.
According to the Large Employers’ 2015 Health Plan Design Survey by the National Business Group on Health, 35% of employers are considering moving retirees and active employees to private exchanges in 2016. The lure of private exchanges is in large part the savings that can be achieved through high deductibles.
Healthy people may ignore the fine print and simply buy the cheapest plan. Lower-premium plans can include narrow provider networks, drug exclusions, and higher deductibles, co-pays, and coinsurance requirements. Many buyers may not consider the possibility of serious illness.
“When you’re getting an insurance plan, you’re not thinking, I’m going to get cancer, or some kind of blood disorder,” said Newton, previously practice director at Cancer Specialists of Tidewater and Riverside Cancer Center in Virginia.
For a patient who assumed insurance would cover most expenses, the cost of a cancer drug regimen and their out-of-pocket obligation can come as a tremendous shock, amplified by confusion over how their policy terms dictate the payment calculation. Coming up with a $3000 copay so that a round of chemotherapy can begin, for example, is simply not in the cards for many patients, Newton said.
Yet physicians say such scenarios are common now and practices must be prepared if they are to provide the appropriate treatment and recover payment.
As a result, financial counseling has become “a big deal” in cancer practices, said Kenneth Adler, MD, vice chair of the American Society of Hematology’s Committee on Practice. Vacirca said his practice’s financial counselor went from part time to full time two years ago, while Thomas Gallo, executive director of the Virginia Cancer Institute, said each of his eight offices has a counselor.