What's the Point of a Deductable?

First of all, anybody who thinks that your average citizen in the United States today is unaware of the financial double jeopardy of going to a doctor, going to an emergency room, getting a procedure is sorely mistaken. Americans today are well aware of the financial risk that they are taking by seeking healthcare in this country.

To illustrate this point, let me read the first couple of sentences from a New York Times best-selling book review: “The illness narrative, ending in financial ruin and decreased quality of life, has become one of the classic 21st-century American stories. In her debut essay collection, Emily Maloney documents the … intersections of money, illness and medicine. For Maloney, the primary experience of receiving health care is not merely a bodily or spiritual event but always … a financial one. She understands … the relationship of money to being ill, … to managing an unfathomable amount of debt.” This is a New York Times best-selling book in the beginning of 2022. 

Add to this something I saw Pete Scruggs write on LinkedIn a while back, which I found actionable. He said:  

“Patients selling personal items or taking on credit card debt after medical procedures is a failure of creativity in providing healthcare. It is possible to build creative health plans that reduce costs for patients with expensive procedures by giving wise guidance at the time patients need it the most.

“It is not enough for insurance to provide access to a wide range of health providers but effectively leave the patient in debt … after the procedures are done. It is possible to buy healthcare so well in the local community that employers can reduce cost dramatically at the time most needed by those using health services.”

And lastly, let me quote from a recent article in JAMA by David Scheinker, PhD; Arnold Milstein, MD; and Kevin Schulman, MD, which says, “The financial consequences of an underperforming health insurance market (one that is not holding down … cost … ) diminishes the quality of life affordable to US employees and their families and the financial viability of employers not in the health care industry.” 

So, in this healthcare podcast, I am speaking with Wayne Jenkins, MD, who is chief medical officer over at Centivo. Before his move into value-based healthcare about 10 years ago, Dr. Jenkins started his career as a radiation oncologist. He has also served as the chief clinician at a bunch of large health systems.

I wanted to have Dr. Jenkins on the show to discuss a recent report which was published by Centivo that methodically dissects how financial toxicity is affecting patients. This includes how it affects choices that employees/patients/members are making both in terms of the care they decide they are willing to pay for or, more likely, the financial risks they’re willing to take. 

In short, the three key findings of the report are as follows:

1. Workers face mounting healthcare affordability issues, and health plan cost sharing features such as high deductibles are an underlying cause.

Just a quick spoiler here: Do you know the percentage of employees who are forgoing buying groceries in order to afford medical expenses left on their shoulders by their high-deductible health plan or by their health plan with excessive premiums? Going hungry isn’t just for minimum wage workers.

2. Medical expenses are a significant cause of mental health and well-being issues for both individuals and also families.
3. The conventional wisdom that health plan members will never “trade off” certain offerings for greater savings is simply false.

The big takeaway here, though, is that the situation that we have in this country today is not a secret among your average regular American civilian. They do fully understand that by entering a healthcare setting, they are very well trading off, in their attempt to be healthy and going to the doctor in pursuit of that aim, they are trading off their financial well-being. And that financial toxicity actually has health implications. If you can’t afford groceries, for example, or your mental health suffers, we get ourselves rather rapidly into a downward spiral, as you may be able to see.

Other episodes dedicated to the impact of financial toxicity and possible solutions are in the show notes. I’m just gonna mention here quickly, we talked to Marty Makary, MD, about his book called The Price We Pay (EP242). There’s an interview with Marshall Allen (EP328) and then also a very interesting conversation with Mark Fendrick, MD (EP308).  

Wayne Jenkins, MD, is the chief medical officer at Centivo. He is an accomplished physician and executive with a proven track record of patient-centered, revenue-driven results. Over the course of his career, he has consistently transformed large, complex healthcare systems into market leaders that deliver quality and value in a dynamically changing environment.

Prior to Centivo, he was the chief clinical officer for population health at Vanderbilt University Medical Center, where he provided clinical oversight of value-based care delivery and completed the formation of Medicare accountable care organizations (ACOs). Before his time at Vanderbilt University Medical Center, he served as the senior vice president and chief strategy officer of Orlando Health, as well as president of Orlando Health Physician Partners. Previously, Wayne was the chief of radiation oncology and then subsequently the medical director for the Florida affiliate of M.D. Anderson Cancer Center, a subsidiary of Orlando Health, Inc.

Wayne holds a bachelor’s degree from the University of Tennessee, an MD from Vanderbilt University School of Medicine, and a master’s of health policy and administration from Johns Hopkins University. He is board certified in radiation oncology and was recognized in Best Doctors in America annually from 1994 to 2015. He has published 18 scientific articles and is often sought out to speak at state and national conferences.

05:23 How is financial toxicity in healthcare affecting patients? 07:02 How do we define a “normal” deductible in today’s healthcare? 08:14 What’s the point of having a deductible? What does a plan gain from a high deductible? 10:43 How does the cost of a patient’s deductible correlate with their use of their health insurance? 12:51 EP308 with Mark Fendrick, MD.15:18 How is health insurance actually sometimes reducing patients’ health? 16:24 What is the defining characteristic of those who are more adversely affected by high deductibles? 17:04 Why should CFOs consider plans with lower deductibles for their employees? 18:26 “Are there other ways to approach this in a marketplace, to get more value for what you’re paying for so this problem can be addressed?” 21:56 How should employers contemplate health plans moving forward? 22:24 “Having the health plan choice gives more financial viability in addition to that open access.” 22:58 “In some sense, [that] can be a zero-sum game. Do you get it in the premium, or is it paid in the higher deductible?” 23:45 “I think there are value choices in the market that may help negate some of the problems that we were just discussing.” 25:33 “I think conventional wisdom may be left over from the ’90s.” 26:49 Why does building these narrow networks have to be a science? 28:38 Does a narrow network adversely affect mental health? 32:20 “Narrow and excellent is not a bad choice for people.”

Wayne Jenkins, MD, of @Centivo_Health discusses health insurance plan design on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

How is financial toxicity in healthcare affecting patients? Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

How do we define a “normal” deductible in today’s healthcare? Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

What’s the point of having a deductible? What does a plan gain from a high deductible? Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

How does the cost of a patient’s deductible correlate with their use of their health insurance? Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

How is health insurance actually sometimes reducing patients’ health? Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

What is the defining characteristic of those who are more adversely affected by high deductibles? Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

Why should CFOs consider plans with lower deductibles for their employees? Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

“Are there other ways to approach this in a marketplace, to get more value for what you’re paying for so this problem can be addressed?” Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

How should employers contemplate health plans moving forward? Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

“Having the health plan choice gives more financial viability in addition to that open access.” Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

“In some sense, [that] can be a zero-sum game. Do you get it in the premium, or is it paid in the higher deductible?” Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

“I think there are value choices in the market that may help negate some of the problems that we were just discussing.” Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

“I think conventional wisdom may be left over from the ’90s.” Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

Why does building these narrow networks have to be a science? Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

Does a narrow network adversely affect mental health? Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

“Narrow and excellent is not a bad choice for people.” Wayne Jenkins, MD, of @Centivo_Health discusses on our #healthcarepodcast. #healthcare #podcast #digitalhealth #healthcarecosts

Recent past interviews:

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