PLEASE USE THE TWO READING BELOW TO ANSWER THESE 2 QUESTIONS:

PLEASE GIVE A DETAILED EXPLANATION

1. How might High Deductible Health Plans discourage plan members from receiving Personal Health Care Services that they need, especially during the current pandemic GIVE TWO (2) EXAMPLES.

2. Indicate ONE (1) WAY in which Consumer Directed Health Plans might be changed to solve this problem. GIVE YOUR BEST JUDGEMENT BASED ON THE READINGS, OR INDICATE A SOLUTION YOU FOUND IN THE COURSE OF YOUR READING.

READING 1:

Coronavirus Highlights the Pitfalls of Health Deductibles

Theres a risk in cost sharing: It may deter people from getting needed care.

A patient with diabetes supplies. When cost sharing is imposed for diabetes, the evidence suggests it leads fewer patients to take their drugs.Credit...Kerem Yucel/Agence France-Presse Getty Images

Much of the care provided in the United States is unnecessary or too expensive. Cost sharing is one way to try to push patients to be more thoughtful consumers of medical care. The blunt way we use it, however, often does more harm than good.

Cost sharing is a blanket term for things like deductibles, co-payments and co-insurance. If patients are spending money out-of-pocket their own money they might think harder about whether care is worth it.

Recent news has highlighted one aspect of cost sharing in the United States that seems to make little sense: the notion of making it start over each year. Because of the way deductibles work, you pay them in the early months of the year, when the flu (and now coronavirus) are hitting.

Since few people have met their deductible yet, many will think twice about getting care now right when the medical community most wants them to. Recognizing this, Gov. Andrew Cuomo recently announced that New York insurers should waive cost sharing for coronavirus testing. But his powers apply only to Medicaid, where cost sharing is already minimal. Those who have private insurance through their jobs or Medicare which is most people and also those people (older Americans) who tend to be at highest risk are under federal regulation.

Craig Garthwaite, director of the health care program at the Kellogg School of Management at Northwestern, says the biggest problem is that we dont discuss often enough what were trying to accomplish: There are two main reasons to consider cost sharing to be efficient. First, we might dissuade excess use of care, and second we might move people across products to more cost-effective options. Otherwise, we are just decreasing the benefits of insurance.

Theres plenty of evidence on the amount of excess care. A study in PLOS One in 2017 asked doctors across the country how much care they thought people received that wasnt necessary. They reported that more than 20 percent of it wasnt. They thought that more than 10 percent of procedures, more than 20 percent of prescriptions and about a quarter of tests werent needed. A review of the literature in JAMA last year estimated that overtreatment or low-value care was responsible for $75 billion to $100 billion in waste a year.

Of course, none of those things happen without a doctors permission. Maybe we need patients to help in saying no.

But it turns out that patients arent very good at differentiating between necessary and unnecessary care. This isnt entirely their fault. If there arent enough in-network specialists available, for instance, all the monetary incentives in the world cant make patients choose more wisely.

Further, some care is clearly necessary. When expert panels deem something worthy of universal screening, for instance, it seems odd not to mention counterproductive to then put up barriers to obtaining it. Doctors dont want patients to second-guess the decision to get these screenings. We want everyone to do it.

That was one of the main reasons that, as part of the Affordable Care Act, all screening with an A or B rating from the United States Preventive Services Task Force would be free without cost sharing. When its deemed necessary for everyone, all barriers are removed.

In many other facets of necessary care, though, the U.S. system isnt nearly as thoughtful. When people have asthma, for instance, and theyre told they need a preventive steroid inhaler, that care is not optional. Doctors are not looking to have anyone question whether its worth their money versus an insurance companys money. We want them to get and use the inhaler.

The same holds true for many chronic conditions. People with high blood pressure must take their medication likewise, people with sickle cell disease, ulcerative colitis and, of course, cancer. When cost sharing is imposed for these diseases, the evidence suggests it leads fewer patients to take their drugs, which leads to worse outcomes.

In no disease is this clearer and more prevalent than diabetes. People with insulin-dependent diabetes, especially Type 1 diabetes, must take their medication, often many times a day, or they risk serious complications or even death in a very short period.

This is where the second reason to use cost-sharing comes into play. Perhaps there are cost-effective options for insulin. In that case, making sure one of them is available for low or no cost seems a good idea.

As things are set up now, when we look for care, there are usually almost no options available with low or no cost sharing. Everything costs money out of pocket, no matter what insulin you choose.

Alternatively, the system could recognize that some diseases or conditions need more care, not less. For these cases, cost sharing could be eliminated or significantly reduced.

In France, people with 32 specific chronic illnesses (making up 13 percent of the population) are exempt from co-payments for treatments for those diseases. In England, cost sharing is minimal, but even so its waived for people with cancer and other long-term conditions. In Germany, those with chronic conditions have their cost sharing capped at half the level of others.

In these countries, the percentage of people 55 and over who skip doses of drugs is much lower than in the United States. (People often skip doses because of the cost.)

One idea would be to change the types of cost sharing to be more strategic. Deductibles, for instance, make much less sense than co-payments or co-insurance. Deductibles just try to make people second-guess their spending, no matter what its on.

A better model might target people who choose high-cost options, increasing their cost sharing. Under a reference pricing system, for instance, insurers commit to pay the full cost for some lower-cost (but high-quality) care, and patients must pay the difference if they decide to go to providers that cost more.

Reference pricing is smarter cost sharing because it puts the pressure not on the use of the service, but on the choice of a high-cost facility, Mr. Garthwaite said. In this way, it is less likely to decrease necessary care while still controlling costs.

Cost sharing which would be eliminated in Bernie Sanderss Medicare for all proposal isnt inherently bad. But right now, it doesnt appear to have a clear purpose, and the novel coronavirus reminds us how urgent a matter this can be. We seem to be getting all the harm without reaping much benefit.

READING 2:

Charging patients just $10 more for medications leads to more deaths

The economic argument for eliminating out-of-pocket costs, in one new study.

It turns out $10 can be a matter of life and death, according to a new study on how patients respond to higher health care costs.

Researchers at Harvard University and the University of California Berkeley examined what happened when Medicare beneficiaries faced an increase in their out-of-pocket costs for prescription drugs. They found that a 34 percent increase (a $10.40 increase per drug) led to a significant decrease in patients filling their prescriptions and, eventually, a 33 percent increase in mortality.

The rise in deaths resulted from people indiscriminately cutting back on medications when they had to pay more for them, including drugs for heart disease, hypertension, asthma, and diabetes.

We find that small increases in cost cause patients to cut back on drugs with large benefits, ultimately causing their death, the authors Amitabh Chandra, Evan Flack, and Ziad Obermeyer wrote. Cutbacks are widespread, but most striking are those seen in patients with the greatest treatable health risks, in whom they are likely to be particularly destructive.

It is difficult to come up with a study design that directly measures the effect of health insurance on health outcomes. These researchers overcame that problem by tracking the prescription benefits for people newly enrolling in Medicare when they turn 65. People with birthdays earlier in the year would be more likely to face higher out-of-pocket costs than people with birthdays later in the year, given the way Medicares benefits are designed. By comparing the data between the different age groups, using as a baseline an estimate of how much the patients would have been expected to spend without any cost-sharing, the researchers were able to isolate the effect of cost-sharing on the use of prescription drugs and mortality rates for patients.

This finding challenges an important assumption embedded in American health care policy. In the 1970s and 80s, the RAND Health Insurance Experiment concluded that small copays encouraged patients to use fewer health care services without leading to worse health outcomes. That helped establish a new economic argument for insurers to ask their customers to put more skin in the game: it would encourage more efficient use of health care services with no downside.

But that premise presumed people would be rational. For example, if they are being asked to pay more money for prescription drugs, they would cut back on less-valuable medications first. The Harvard/Cal study didnt detect any such rationality. When costs went up, people just stopped filling their prescriptions for statins high-value drugs that are effective in preventing heart attacks.

The researchers explained it like this: The way patients behaved when faced with higher out-of-pocket costs would suggest that they placed very little value on their lives. They literally stopped taking high-value drugs because of the price.

I never thought we would get a mortality effect of this size, Chandra told me. We never thought people would be cutting back on life-saving drugs to this degree.

If patients cant make good value judgments, the economic argument for cost-sharing starts to crumble, and it starts to seem like eliminating cost-sharing increasing the likelihood patients will continue to take the medications they need to stay alive would be a cheap way to buy people more health. As the researchers wrote, improving the design of prescription drug insurance offers policy makers the opportunity to purchase large gains in health at extremely low cost per life-year.

Bernie Sanderss Medicare-for-all single-payer plan eliminated cost-sharing. Thats one way to do it. Chandra said that, alternatively, the government could create new regulations to put a limit on cost-sharing for the large employer plans that cover most working Americans. He said Medicaid is really the model; the 70 million poor Americans enrolled in the program generally have no out-of-pocket obligations.

Eliminating out-of-pocket costs would come with a price: Insurers would likely charge higher premiums to offset the loss of the copays and coinsurance that currently reduce their direct costs. But if the goal is better health outcomes, that is arguably a price worth paying.

If we care about the sick more than the healthy, then we should be willing to raise premiums to reduce cost-sharing, Chandra said. I think a lot of American health care is catastrophic coverage to the healthy, which is fine. Thats valuable. But its not as valuable as first-dollar coverage for the sick.