For millions of Americans, health care is increasingly becoming a retail market. More than one in five Americans with private insurance is enrolled in a high deductible health plan. According to the 2014 Kaiser Family Foundation survey of health care benefits, 61 percent of employees in small firms and 41 percent of workers overall have a deductible over $1,000.
On average, the deductible for single coverage is slightly over $1,200. In an HCI3 analysis of a large commercially insured population, a significant percentage of the insured have total annual health care expenses of less than $2,000. This means they pay most of these health care expenses out-of-pocket. Beyond the base deductible, many insured workers also have to pay co-insurance until they reach their out-of-pocket maximum. Depending on where that maximum and co-insurance percentage are set, cost sharing can continue for total health expenses in excess of $20,000 per year.
For the insured, health care has become much more retail, in the traditional sense of the word, as patient-consumers shop around for health care the way they shop for other household items and services. Patient-consumers are partially or wholly financially responsible for everything from routine sick care to some of the most frequently performed procedures in the U.S. For example, the average total price of a pregnancy and delivery is about $6,500, a colonoscopy procedure (including pre and post-procedure prices) averages $2,500, and a knee arthroscopy procedure averages $7,000.
However, these price averages are just estimates. Other experts have documented the variability in the total price of a medical episode of care. As a result, information on the predicted price for the treatment of an illness, injury, or condition has become all the more important for patient-consumers. Many employers have recognized this and worked with their third-party administrators or other vendors to deploy information on health care prices to their employees.