Toxic Side Effect: High Out-of-Pocket Health Care Costs

It’s time for physicians to consider treatment costs as a critical part of care.

    • October 18, 2013

When is the treatment worse than the disease? When the high costs associated with care become a financial burden for patients and in many cases prevent them from protecting their health, contends Peter Ubel, MD, a 2007 recipient of a Robert Wood Johnson Foundation (RWJF) Investigator Award in Health Policy Research.

“We have reached a point where patients’ out-of-pocket health care costs can have more of a negative impact on their quality of life than some illnesses,” Ubel says, citing the thousands of dollars in deductibles, co-pays, coinsurance, and other charges that even burden people with health insurance. The potential financial devastation of the uninsured is also increasingly a factor, especially for people facing serious diseases.

Bringing Costs Out of the Closet

Ensuring that patients understand the possible side effects of a surgery, medical treatment or prescription drug is considered standard medical practice. Unfortunately, that’s not the case when it comes to warning patients about what they may have to pay for care. Engaging patients in a candid conversation about treatment costs is critical at a time when out-of-pocket costs for breast cancer treatment, for example, may run as high as $55,000, Ubel argues.

“Health care costs have risen faster than the Consumer Price Index for most of the past 40 years,” Ubel and his co-authors write in the article “Full Disclosure—Out-of-Pocket Costs as Side Effects,” in the October 17 issue of the New England Journal of Medicine. They report that more than 30 percent of insured people older than age 65 are burdened by medical care costs. For senior adults with public insurance, 38.7 percent report struggling with medical care costs; the percentage is 46.7 for the uninsured.

Americans under age 65 fare better, with only 12 percent of those with private insurance reporting financial burdens related to medical care. But more than 20 percent of those with public insurance are shouldering unmanageable health care costs.

Ubel, a professor at Duke University’s Fuqua School of Business, uses the costs incurred by cancer patients as an example, but advises that out-of-pocket expenses can become a problem for anyone, especially people with chronic illnesses. “A recent study published in Health Affairs shows a two-fold increase in bankruptcies among people with cancer,” he says. For young cancer patients, the increase was two-to-five-fold. He writes that “out-of-pocket-costs can approach $40,000 per year for a patient with a myocardial infarction requiring hospitalization.” But even patients managing diabetes without complications shell out roughly $4,000 a year.

Cutting back on medication, food, and other health-sparing necessities is all too common among people juggling health care expenses, according to Ubel and his collaborators, Yousuf Zafar, MD, and Amy Abernethy, MD. While the information about treatment-related costs is sometimes unavailable to health care providers, Ubel thinks they can play a significant role in helping consumers manage health care expenses.

Expanding the Definition of Care

“We want physicians to see patient’s out-of-pocket health care costs as a medical issue, not an economic one,” explains Ubel, suggesting a shift in physicians’ current approach to communicating with patients about treatment. Acknowledging that physicians are not trained to discuss care costs, he adds, “I understand that talking about costs may feel unseemly, but we have got to get over it.”

Ubel thinks that physicians can help in several ways:

  • “By talking openly about costs, the physician eliminates the possibility that the patient may only feel comfortable bringing it up later when they are no longer able to afford to adhere to treatment guidelines,” Ubel says.
  • While financial assistance is not always available, Ubel advises that “some providers may be able to refer patients to social workers or help them obtain supplemental insurance to help defray costs.”
  • One of the most straightforward ways that physicians can help is by simply offering a lower-cost treatment or medication if one is available, he adds. “When I worked for the Veteran’s Administration, patients would often come to us for care because they knew we could offer lower-cost medication,” Ubel says. “But once I reviewed many of these patients’ treatment plans, I discovered that they could have been given cheaper generic drugs by their private physician.”

Speaking on the patient’s behalf, Ubel says, “I also think that patients should be encouraged to ask about costs and lower-price treatment options. I think it’s their right.” In his article, Ubel points out the importance of offering people an opportunity to seek financial support as early as possible in their treatment. His research team interviewed a cancer patient who lost her house because of the cost of her treatment. Once she told her physician, he suggested she apply for help. She did and received financial assistance. “One has to wonder,” Ubel writes, “if an earlier discussion of out-of-pocket costs might have prevented the patient from losing her home.”

 

Related Websites

Learn more about the RWJF Investigator Awards in Health Policy Research.
For an overview of RWJF scholar and fellow opportunities, visit www.RWJFLeaders.org.

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Thirty percent of insured people older than age 65 are burdened by medical care costs.