Health care financing confuses consumers

Consumers are interested in a variety of financial instruments to help them purchase health care. However, even when given a choice to shop for and eventual purchase insurance, millions of people don’t.Retailhealth

Consumers are confused about health plan choices and need help in financial decision making. Data from McKinsey presented in an essay, "What consumers want in health care," analyzes results from a survey of about 3,000 retail health consumers. According to McKinsey, "many consumers aren’t accustomed to shopping for health insurance, so they are not prepared for this additional responsibility."

One of the most surprising, sobering findings is that people were more concerned about the cost of illness than about the illness itself.

McKinsey found age differences in the population vis-a-vis health cost
concerns. Not surprisingly, younger people 18-34 are more concerned
about dental and accidents; older people are more worried about major
medical events and LTC.

Thus, there’s an opportunity to develop relevant and useful financial
services and tools that help consumers sort out these tough decisions.Fundinghealthcare

This chart inventories some of the possibilities. Beyond insurance
products, for example, some consumers like the idea of discount cards
and annuities.

Note that there isn’t a great deal of variance in consumers’ minds
between the uses of these mechanisms based on whether the funds would
go to long-term care, catastrophic expenses, or medical cost increases.
The biggest differentiator is for catastrophic expenses, where
consumers seem to understand the application of a savings vehicle.

Many consumers like the idea of paying for support and advice for
guidance. However, McKinsey found that while about 70 percent of consumers
want such support when shopping for new coverage, only 41 percent of those who
had access to it found it "satisfactory."

Jane’s Hot Points:
You know you have a problem with your health system
when you’re more concerned about the cost of your care than fighting
your disease. McKinsey’s survey data reveals a dazed and confused
health consumer who says she’s willing to play the game, but needs the
right tools to do so. McKinsey did a comprehensive survey into
consumer-directed health care i
n 2005. How far have we come since then?
According to this latest survey, in 3 years, not nearly far enough.

3 replies »

  1. After reading through some of the posts here about health care, it’s no wonder that so many are confused and give up. I’m not especially cognitively impaired, and it’s very confusing for me. I can’t imagine how confusing it would be for those that are not so smart, and possibly sick.
    It’s all too much for the average person to figure out. We need things to be much easier to understand.
    This problem is a big incentive to go with single payer, that’s for sure!

  2. In regards to the statement: “there’s an opportunity to develop relevant and useful financial services and tools that help consumers sort out these tough decisions”
    Would a tool such as a web-portal allowing patients real-time access to their self-pay balances and a host of payment options to pay this balance be of any value to a provider. The portal’s goal would be to reduce the confusion and ambiguity around the question “how much do I owe?” and would allow the patient to clearly see the portion of their healthcare bill that they are responsible for along with a way to securely pat on line. All in effort to reduce confusion, simplify the payment process, and encouorage faster payments. Would patients utilize such a tool? Would providers install such a tool on their web sites?