Physicians

CONSUMERS: Trade up players, but maybe not enough of them

Once again there’s something very important in a WSJ/Harris poll which concentrates on the people that, when I was at Harris, were called the "Trade up players". These are the people with enough discretionary income to buy themselves a better class of service from their providers.  As I know many of you don’t have WSJ access, I’ve quoted most all of the results.

"Do you have health insurance? It could be from an employer, that you purchase yourself or from a government program like Medicare or Medicaid?"

Base: All Adults

Yes, have health insurance 87%
No, do not have health insurance 13

* * *

"Which one of these statements best describes you?"

Base: Adults with health insurance

Total
I only go to doctors that accept my health insurance 85%
I sometimes go to doctors who don’t accept my health insurance 15

* * *

"Whether or not you have done so in the past, how willing would you be to go to a doctor who doesn’t take your health insurance if he or she was highly recommended by a source that you trust?"

Chart1

"How willing would you be to pay the full cost of a doctor’s visit – rather than use your health insurance – if you . . .?"

Chart2

The important issue is that pretty uniformly, those with incomes over 50K, which is a little over average household income and around US median income, are willing to spend more money to get a better class of service. Obviously this means a couple of things

a) If you are marketing a health care service to wealthier Americans there is a willingness to pay for it. Of course that’s a well known fact to chiropractors, orthodontists, and cosmetic surgeons. But it might mean that other physicians and providers might start to think about providing better access and customer service, for a small fee (and I don’t mean insisting on $20,000 for concierge service). This is the Nordstroms approach, and one that health care providers should be thinking about emulating (and one that some are).

b) This willingness to pay is a minority effect — it’s a big minority and may be a majority in the case of referrals from someone the patient trusts.  But for most of these services more people are unwilling to pay extra, and of course large majorities of those with lower incomes, even those with health insurance, do not want to pay extra.

This tells me that continued bifurcation is likely to be the case when people seek health services that they have to pay out of pocket for, with roughly double the number who want to "trade up" skimping on "extras". Why does this matter?  Because in our brave new consumer world, cash may be an increasingly important way that patients pay for health care, especially for "minor" care out of their HSAs. So this correlates with much other data about user fees at the point of care–they tend to prevent lower income people from getting care (including often needed care).

Like it or not, we are slowly heading towards this future.  Unless, that is, you live in Rochester New York.

Meanwhile, (and this is a bit of a throwaway for Ron) the Kaiser Network Health Policy Report notes that the CBO is out with a study showing that "Uninsured workers are unlikely to purchase individual health insurance, regardless of whether they receive tax credits or other subsidies to help cover the cost of premiums, according to a report released on Friday by the Congressional Budget Office". Proving to my mind once again that high deductible health plans are not going to solve the uninsurance problem and that voluntary universal health care is a myth.

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Ron GreinergadflyMatthew HoltJoe C. Recent comment authors
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Ron Greiner
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Ron Greiner

It’s not just me with the Ownership Society gadfly, it’s the President too.

gadfly
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gadfly

//Do you think Ron can afford it?//
He’s the one arguing for the free-for-all ownership society. Time to put his money where his mouth is. 😉 ‘

Matthew Holt
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Do you think Ron can afford it?

gadfly
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gadfly

//Go ahead and put up a podcast of our commercials so everybody can get a “feel” of the HSA.//
Matt – you should think about this. And you should charge more for running a podcast commercial than posting links.

Joe C.
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Joe C.

Ron, I agree completely. Recall this dire press release from FamiliesUSA: “According to Families USA, 14.3 million U.S. residents spend more than 25% of their incomes on health care; this number grew by one-quarter between 2000 and 2004.” When the claims in this statement were independently verified (by me), it revealed the following much less sensational reality: In 2004, it is estimated that about 4.9% of people in the U.S. were part of a family whose total healthcare utilization (by those under age 65) cost someone an amount equal to at least 25% of that family’s annual earnings; this number… Read more »

Ron Greiner
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Ron Greiner

Matthew, I don’t believe that agenda driven garbage from the Kaiser Family Foundation and the Robert Wood Johnson Foundation, trust me I know. These people first come up with the results they want and they are totally biased. I’m sure, uninsured people won’t take free health insurance, come on. I have just produced our new HSA Radio commercials with special attention paid to slowing down all the uninsured from jamming our phones and website. I like to leave the uninsured to the rookie HSA salespeople. We prefer to switch people who currently have coverage because they have money and can… Read more »

gadfly
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gadfly

On the Liver Cancer story: the really great thing about LiveJournal, as opposed to more professional “journalism” style blogs, is that you can join or build communities of common interest. That sort of thing could eventually have some sort of political impact.

Matthew Holt
Guest

Head exploding is what we’re all about. But if health isn’t a public good, why is education? Meanwhile I’m reading (or actually on the verge of starting to read) a new book from the Cato guys on what they think we should do (which probaby fits closer to your paper). If you want to send me yours I can add it in the review. Of course I may not agree with every point. On the other hand, if we can get to a genuine coverage system that protects agains medical bankruptcies and the kinds of terrible impact on families like… Read more »

Joe C.
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Joe C.

Matt, Point taken, but my point is that you can’t force people to take what they don’t want (e.g. auto insurance, jobs, education), even by law, regardless of its rectitude. As you love to point out, health care is not a classic market, but neither is it a classic public good (Kenneth Arrow) as are education and defense, to which you refer. As I pointed out the other day, you have to realign incentives and change attitudes before you can affect the wholesale change you desire. I maintain that CDHC would require less change in attitudes, behavior, and time in… Read more »

gadfly
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gadfly

//user fees at the point of care// In the current system, cost and difficulty are deliberately being used to discourage the poor from accessing care. If you tell a poor person that they will have to pay $2000.00 for the ER visit, they will go elsewhere and try to suffer it out, hoping they are wrong about those early signs of lymphoma or their raging case of typhoid will just go away. Poor people are inured to the idea society expects them to suffer if they can’t pay their way out of it. What county hospitals are currently doing is… Read more »

Matthew Holt
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//Somehow we are going to have to get others to pay for what these people apparently don’t want, and then make them responsible enough to use it.// Well Joe,You have hit the nail on the head. As discussed elsewhere in the comments here when I was criticized for being oppsed politically ti HSas but still had one, I pay for plenty of things I don’t use and/or dont want to pay for. I dont have kids, but I pay taxes for schools, I don’t want troops in Iraq but I’m paying for that too. Unless you’re completely blind you know… Read more »

Joe C.
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Joe C.

“Proving to my mind once again that high deductible health plans are not going to solve the uninsurance problem and that voluntary universal health care is a myth.” Wow! That’s quite a leap of (il)logic. At best, the study confirms what we’ve known for years: relatively young, healthy, single adults would rather spend their money on something else, regardless of cost (to a point). As with anything, we can argue about their decision, but it is THEIR decision. To generalize these results to any other population is inappropriate, especially since the pseudo-R-square is about 0.2. There is 80% of the… Read more »