Alegeus Pushes The Amazon Model For Healthcare

High deductible health plans with health savings accounts (HSAs) are an increasingly common feature among American healthcare consumers, according to data from the Bureau of Labor Statistics. In 2017, roughly 20 percent of Americans had such plans. As of 2019, the last year data is available, 26 percent of consumers had them. They are even more prevalent among Americans working for small to midsized businesses, where 47 percent reported holding such policies as of 2019.

Unfortunately, these plans are misunderstood by the vast majority of the workforce that has them. As healthcare solutions provider Alegeus Senior Vice President Brian Colburn told PYMNTS in a recent conversation, many workers never bother to put so much as a single dollar into those HSAs.  When they conducted their own survey on the subject last year, it showed the rather disquieting result that 88 percent of consumers lack so much as a basic level of literacy around their healthcare. The majority of consumers, he said, make their first mistake in onboarding and choose the wrong plan entirely for their needs.  They never set up their HSA, let alone use it, meaning they pay all their healthcare expenses with post-tax money instead of pre-tax spending.

“Consumers are paying an ever-larger share of their own healthcare expenses out of pocket, but 88 percent of them have no idea what they are doing,” Colburn said. “That’s a huge problem.  And what we are seeing is a lot of solutions over the past five years that help consumers. But they’re not working in the way that they should.”

He said consumers don’t need five solutions with five separate apps and log-ins to manage to get a grip on their healthcare spending. They need one. A single-point solution where they can access their plan and understand the financial side of their care, contribute to it for maximum advantage and secure their best possible pricing for their needs. Alegeus, which provides white-label HSA solutions for health insurance companies as part of its offerings — is building that single point around the HSA.

As Colburn sees it, shopping for healthcare should be like shopping for anything else, and no different from shopping on Amazon. The market is getting there but running about a decade and a half behind the rest of the world. But today, he said, we can do a lot to reduce the cost of healthcare simply by putting the right tools in patients’ hands to make the process less mysterious on the whole for consumers.

Unbreaking The Pain Point

Picking a care provider, in any area, is difficult work, Colburn said, and one where consumers are prone to thinking paying more equals better quality. In fact, he said, the implication is the other way around, in most cases. The doctor who does a procedure most often will charge less, he said, because they tend to be the most efficient.

Among the tools they wrap around HSA accounts, he said, is the provider finder tool which allows consumers to compare local providers on price and other criteria. They also provide the complementary pharmacy finder tool to point them directly to where they ought to buy their prescriptions.

“Once people get into these plans, we can actually guide them the other 364 days of the year with sort of practical advice that’s customized to them and how they’re using their healthcare,” Colburn said. “Because, for most people in this country, the thought of opening an HSA and putting $7,000 into it every year is not practical advice and it’s not good advice.”

What is good advice, he said, is to point out that with their high deductible health plan, a consumer faces, for example, a $1,500 out-of-pocket exposure and should try to save that as a bare minimum. By giving them the tools to let them know where to seek care, where to pick-up prescriptions, how to plan for their medical expenses, he notes, allows consumers the kind of education and information to be good healthcare shoppers.

Creating More Good Consumers

Most people don’t want to think about healthcare savings accounts or their healthcare in general because it’s difficult and because, at base, no one likes thinking about getting sick. Colburn said that’s natural and normal, and technology can take the strain and hassle out of that for them by centralizing and simplifying the data so that a consumer can access how far into their deductible they are or how much they have saved. Alegeus even has a feature, he said, that lets patients draw on their future planned HSA savings in the event of a high-cost accident early in the year that has happened before the account has had a chance to build up.

But there needs to be more done to encourage consumers into the space.  For example, when employers make HSA accounts open automatically by seeding them with $500 to start, he said, that has tremendous power to encourage consumers to use and interact with them. That employer still saves money over the option of choosing a lower deductible plan and can really encourage better care for their workers in the future by doing so.

“The trouble with healthcare spending is that it doesn’t look like other parts of our lives. Healthcare needs to catch up with [the] Amazon experience. And everybody in the healthcare system needs to play a role,” Colburn said.