The Hippocratic Oath in the Age of Accountable Care – First Do No (Financial) Harm

Patients are becoming increasingly responsible for a greater proportion of their medical costs. The upfront share of premium payments, cost sharing at the point of care in the form of copays and deductibles, as well as the proportion of Americans with high deductible plans, have all been increasing. Since patients are the ultimate consumers of healthcare services, the issue of cost and the efforts to minimize the “financial harm” that can result from overprescribing, overtreating, or simply overlooking price differences among similar treatments should be a top concern of healthcare providers. Does the Hippocratic Oath that physicians take upon entering the practice of medicine extend to avoiding financial, as well as physical harm? Patient cost sharing was originally designed to reduce the likelihood of moral hazard in healthcare service utilization. However, it has been increasingly used to shield payers and employers from the escalating costs of medical care, thereby shifting more of the burden onto the patient. While this might help reduce the utilization of unnecessary services that are price elastic (i.e., the quantity demanded changes with price), essential medical services such as those related to trauma or life-threatening conditions are inelastic (i.e., changes in price have little effect on demand) and often more costly. Cost sharing should be subject to the principles of value-based benefit design which aligns incentives to promote the use of high-value services that are likely to reduce overall treatment costs and utilization. Patients can be harmed by medicine in a variety of ways, including receiving treatment that is unnecessary, inappropriate, poor quality, unsafe, or produces side effects or other harms that could outweigh its benefits. Providers have become more sensitive to these issues as payers insist on paying for value rather than the volume of services. However, as costs have shifted to patients, value-based payment systems have yet to catch up. Patients still contribute their share of the medical bill on a fee-for-service basis. With more at stake, patients have a strong interest in receiving care that will produce the greatest value, while avoiding care that is financially harmful—from brand name drugs that have a generic substitute to elective procedures that have a small probability of improving their condition. The financial impact of medical treatment received by the patient should matter to the provider, particularly during this era of accountable care and a shift from volume to value. Discussions that physicians have with patients should not only include the pros and cons of treatment from a medical perspective, but the financial cost to the patient, as well. It isn’t that physicians or medical staff are unwilling to have these conversations with their patients, the problem is that they don’t know the potential costs to patients, or even what rate has been negotiated with the patient’s insurer. The necessary steps to reduce the likelihood of financial harm to patients include:

1. Price transparency to the patient: Information symmetry must occur for the patient to be able to make informed choices about their healthcare and the costs and benefits associated with it.
2. Price transparency to the provider: Providers need at least a basic familiarity with the financial ramifications of the services they provide and treatment recommendations that they make to their patients.
3. Value-based insurance design: Simply raising copays and deductibles across all services for all patients will not produce the incentives that patients need to encourage use of high-value services that lead to long-term positive outcomes.
4. Disincentivize the use of low-value services: While this may seem to be the opposite of incenting the use of high-value services, it is much more difficult to accomplish in a system where consumers do not welcome barriers to the medical services they want, even if they are not likely to provide much benefit.

Patients will continue to shoulder an increasing share of their medical expense. The challenge is to promote the use of high-value services that are most likely to lead to positive outcomes without placing undue financial burden on the patient. Steve Delaronde is director of consulting for populations and payment solutions at 3M Health Information Systems.