With health care costs continuing to rise, Nebraskans, their employers, governments and many providers are looking for ways to save consumers money.
According to a November report from the Center for American Progress, overall U.S. health care spending grew from $2.6 trillion in 2010 to $4.1 trillion in 2020, a 58% increase. Health care spending now accounts for nearly 20% of gross domestic product.
Health insurance premiums have matched or exceeded that rate of increase, with the Kaiser Family Foundation Employer Health Benefits Survey showing that individual coverage premiums rose 58% from 2010-2022, while family coverage premiums were up 63%.
Employers have absorbed some of those costs, but much of the burden has shifted to workers in the form of increased premiums and higher deductibles and co-pays. The Center for American Progress reports that average deductibles for single-coverage plans nearly doubled from 2010-2021, going from $1,025 annually in 2010 to $2,004 in 2021.
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Many people are facing higher out-of-pocket costs, as well, especially in Nebraska. According to a study published in August by the Health Affairs Journal, as of 2019, Nebraska was tied for seventh among states in the percentage of health expenses paid for out of pocket by consumers, at 31%.
So what can people do to limit what they spend on health care?
Though health insurance costs continue to rise, having insurance is extremely important, said Sarah Maresh, Nebraska Appleseed's health care access program director.
"Having insurance is often a really good indication that people can access care," she said.
That means they can get the preventative care they need, such as annual physicals, health screenings and vaccines, Maresh said, and it also provides access to a primary care physician so they can avoid pricey visits to urgent care clinics or the emergency room.
Taking advantage of a free screening helped Warren Fick avoid a costly and potentially life-threatening battle with cancer.
The 46-year-old Bennet man took advantage of new colon cancer screening guidelines that lowered the recommended age from 50 to 45 and got a colonoscopy last fall.
Even though he had no family history of colon cancer or any concerning symptoms, a small polyp removed during the procedure turned out to be cancerous. He had surgery three weeks later to remove a small part of his colon, and he is now cancer-free. No further treatment is needed.
Fick, who is a parts manager at Butler Ag Equipment in Pickrell, said he always preaches preventative maintenance to his customers, because if they own a piece of equipment long enough, it will break down.
He said the same analogy can apply to recommended health screenings.
"Our bodies are no different," he said. "Sooner or later something's going to break down if you are fortunate enough to live long enough."
While having health insurance and using it for preventative purposes can help control costs to some degree, more work is required to get the most out of it.
"Really understanding your health insurance policy is important," Maresh said.
That means knowing the difference between in-network and out-of-network providers, what your deductible and out-of-pocket costs are, and when and how to challenge insurance denials, she said.
Dr. Bob Rauner, president of Partnership for a Healthy Lincoln, said shopping around for care when possible is another way consumers can save money.
That might mean checking with different providers and comparing prices when you need a procedure or imaging such as a CT scan. It can also mean using a service such as GoodRx to find the best prices on prescription drugs.
Rauner admitted, though, that doing so can be a lot of work because of a lack of available information.
"It's frustratingly difficult for an individual patient because of a lack of price transparency," Rauner said.
He estimated there is $20 billion to $30 billion a year in waste in health care, and about one-third of it is because consumers don't know the prices they are paying ahead of time.
"It shouldn't be that hard, but unfortunately it is."
Legislation passed in recent years has attempted to make it easier for consumers to get more information about health care prices.
The federal No Surprises Act, which went into effect at the beginning of 2022, provides consumers with some protection from excessive billing related to emergency care, including air ambulance services, as well as some non-emergency care.
Another rule went into effect at the beginning of 2021 that requires hospitals to publicly post the costs of their items and services online. However, a report released last year found that only 14% of health systems had fully complied.
And even at those hospitals that have complied, it can be difficult to locate the information.
Rauner said he's not yet been able to figure out how to get the information he needs on costs at Lincoln hospitals using apps they provide, "and if I can't figure it out, most people are going to have a hard time finding that out as well."
Rauner, who also is chief medical officer for OneHealth Nebraska, an independent physician association, said providers can play a role in helping people save money, as well.
Providers making changes
More and more health care providers are moving away from the traditional fee-for-service model that has dominated health care for decades and forming direct primary care or direct specialty care practices or doing what is referred to as concierge medicine.
According to a 2021 National Institutes of Health Study, the tally of direct primary care practices had grown from only 125 in the U.S. as of 2014 to more than 1,500 by 2021.
In such practices, patients may pay a monthly fee to be able to schedule unlimited appointments or pay a per-visit cost that is often lower than what they would pay under their insurance policy.
Kelcey Robak, a physician assistant, said it was the shift in health care delivery during the coronavirus pandemic that gave her the idea for her online direct-care dermatology practice.
Robak, who grew up in Columbus and got her undergraduate degree from the University of Nebraska-Lincoln, went to Marist College in Poughkeepsie, New York, to get her master's degree in physician assistant studies. After graduating, she went to work at a dermatology practice in the Northeast.
Then COVID-19 hit, and the practice she worked for had to pivot to telehealth.
"What I found was that a lot of patients loved it," Robak said, noting that patients told her they found the telehealth appointments very convenient and accessible.
That experience convinced her that she could offer an exclusively online dermatology service, which she started in October.
Robak provides care for a narrow range of skin conditions, such as acne, alopecia, psoriasis and rosacea, and usually is able to offer same-day appointments. Patients pay a flat fee of $79 for the first appointment and $69 for follow-up appointments for the same condition.
She said she likes the transparency of the model.
"Patients know exactly what they are paying before the appointment even happens," she said.
Robak, who splits her time between Columbus and New York, doesn't accept any health insurance but patients can submit the charges to their insurer to request reimbursement. Patients can pay for visits using money from a health savings or flexible spending account.
Saving through smaller network
Like many providers, companies are looking for innovative ways to provide health insurance coverage that's cheaper both for them and their employees.
"A real trend in health care today is ... a movement called direct to employer," said Kim Lobato, an area vice president with insurance consulting firm Gallagher.
The benefits of that type of arrangement include better rates and a better way for employers to keep their employees healthy, he said.
One company that has gone to that model is NFM, formerly known as Nebraska Furniture Mart.
Tiffaney Skaw, NFM's strategic human resources manager, said the effort started several years ago as a way to help its roughly 5,000 employees, including 2,200 in Nebraska, better manage chronic conditions such as diabetes.
That effort evolved into more of an overall evaluation of health insurance.
Eventually, the company moved to a tiered health insurance system, where certain preferred providers were in a top tier of coverage and all others were in a lower tier.
Then in January 2021, it switched to its own "narrow" network that includes a few specific medical practices and only certain hospitals — Nebraska Medicine and Methodist Health System in Omaha and Bryan Health in Lincoln. Last year, the company went to the same system for its employees working in stores in Kansas City, Kansas, and the Dallas suburbs.
Though there are some exceptions for emergencies and rare medical conditions, the plans by and large require employees to go only to participating hospitals and only see providers from a limited number of practices.
While it's taken a fair amount of time and work, the payoff has been worth it, company leaders said.
Skaw said NFM's costs for both premiums and claims are lower now than they were in 2018, even as most companies have seen increases over the same period averaging about 20%.
Employees are paying less in co-pays to see doctors, and the costs of the plans offered have gone down.
For example, she said, NFM reduced employee premiums on two of its health plan options this year and made another plan completely free.
Skaw herself has a high-deductible health plan, "and I pay less this year than I did three years ago."
Lobato said he's working with companies all over the country that are looking at adopting a similar model.
Because of the increasing cost of health care, employers are, "trying to take matters into their own hands," he said.
Working to cap drug prices
Another entity taking matters into its own hands, especially when it comes to prescription drug costs, is the federal government.
Starting this year, Medicare has capped the out-of-pocket cost of insulin at $35 a month, and in 2025, annual out-of-pocket costs for all drugs will be capped at $2,000.
U.S. Sen. Bernie Sanders (I-Vt.) and Rep. Cori Bush (D-Mo.) are attempting to take that a step further, introducing a bill last week in Congress that would limit the cost of insulin to $20 a vial.
Government health insurance programs, such as Medicaid and, especially, Medicare, have been aggressive in reducing their costs, which saves taxpayers money, but often shifts costs onto private insurers, critics say.
The Nebraska Hospital Association provided data on five common medical procedures, from labor and delivery services to hip replacements to care for pneumonia, and the differences between government and private reimbursements.
Medicare and Medicaid paid anywhere from 60%-85% of the actual costs of care provided, while commercial insurers paid anywhere from 130% to 215%.
Hospital leaders have been saying for years that reimbursement rates from Medicare and Medicaid are not keeping up with costs, which have skyrocketed since the pandemic. According to the association, the state's hospitals have reported labor costs up more than 20%, supplies up 15%-20%, food and utilities up 10%, and the cost of drugs up more than 35% in the past two years.
"If provider rates are not adjusted to keep up with inflation, many of our hospitals will be forced to cut much-needed programs and services for these individuals who need care the most," the organization said in a statement.
Rauner said it may take an "all of the above" approach, with insurers, employers, individuals and the government working to lower costs.
"I wish a free market would fix it, but sometimes it can't," he said.
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