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Modeling the True Cost of Delays in Healthcare

People delay seeking healthcare for a wide variety of reasons — based on everything from financial concerns to convenience — but those delays come with a cost. In this post, we try to illustrate the potential savings of resolving payment-related delays in care for a commercially insured population.

Flat lay of medical items surrounding a note board

By Jay Moore, M.D.

It happens to everyone: You’re hurrying to get to work, and you notice a little yellow light blink to life as you start your car. You try to ignore its amber glow, hoping it will fade somewhere between dropping your kids off at daycare and pulling into your office parking lot. But after your 30-minute commute, you’re forced to acknowledge that your check engine light is indeed still on.

“Maybe it’s nothing,” you think. Life gets busy, and you start to ignore the warning sign. Before you know it three months have flown by.

Finally, you take your car to the auto shop. As you sit in the waiting room enjoying a burnt cup of coffee and day-old donuts, the mechanic comes in. He has a grim look on his face and shakes his head slowly.

“It’s gonna cost you,” he says. “If you’d come in right when that light came on, it might be a lot cheaper. But as it is, we’re going to have to do a lot more work.”

Sigh. If only you had gotten your car checked out sooner! Now you’ll be spending extra money for something that would have been an easy fix a few months ago.

The human body is like a car in many ways. Pay attention when something seems wrong, and the fix is usually pretty easy. Let it go for too long, and you’re looking at a much tougher problem to solve. Employers, providers, and health plans should care about this because these delays can result in much higher costs for everyone.

For example, a diabetic patient who puts off seeing their doctor can easily see their blood sugar spiral out of control. And for folks with diabetes, being out of control by even a couple of percentage points can carry significant costs! According to one study, the cost difference between good diabetic control and even moderately uncontrolled blood sugars is about 20%.

Another example can be seen in the landmark Framingham Heart Study, which tells us that the lifetime risk of developing heart failure — one of the most expensive conditions in all of healthcare — is twice as high in people with poorly controlled blood pressure than in those with normal blood pressure. It's hard to find precise numbers about how much extra is being spent because of delays in care, but studies involving people who have problems like the ones listed above suggest that delays in care can .

But what drives these delays in care? Why doesn’t everyone go to the doctor when they start feeling sick or seek care from a specialist when their primary care doctor recommends it? A comprehensive study published in 2014 found three major reasons why people delay care:

  • 33% of respondents reported having bad experiences when seeking care (e.g., mistrusting doctors, wanting to avoid long waiting times, or simply disliking the act of seeking care).
  • 12% of respondents did not feel they needed care, believing their condition would improve or that their illness was simply not serious.
  • 58% of respondents said there were barriers to medical care, usually related to cost.

Solutions exist that can address each of these problems, although evaluating those solutions can seem daunting. Decision-makers for health plans and providers should consider a few key factors when addressing these solutions:

  1. The solution should be easy to implement. Solutions that require broad adoption by physician offices or a heavy HR lift for an employer will not be scalable across an entire population.
  2. The solution should be offered to as much of a population as possible. It’s hard to know who might have financial challenges and face delays in care as a result.
  3. The solution should have high member satisfaction and good adoption across the population.
  4. Perhaps most importantly, the solution should be inexpensive. Most decision-makers seek solutions that will generate at least a 2:1 return on investment, or ROI.

Even though ROI is an important factor, modeling potential returns can be a challenge. To help illustrate the real-world consequences of delays in care, we set out to model what happens when people defer care — specifically related to cost concerns. We chose this element because there is a significant amount of data that supports cost being a barrier to patients getting timely care.

For instance, a Kaiser Family Foundation survey found that fully half of Americans had put off care because of an inability to pay. Additionally, a Gallup poll found that 25% of people had delayed care for a serious medical condition because of an inability to pay; another 8% had delayed care for less serious medical conditions. Paytient’s own data tells us that 34% of people who have used our card would have delayed or put off care if they didn’t have Paytient to mitigate this issue.

We have built a simple model to illustrate the potential savings of resolving payment-related delays in care for a commercially insured population. Assume a population of 100 commercially insured members; 42% of those members have two or more chronic conditions that require timely medical care.

To determine the baseline cost for these members, we know that people with two or more chronic medical conditions have an average annual cost of $19,000. Based on the data described above, we can estimate that 35% of those folks could delay care due to financial concerns. Finally, we can use our previously discussed estimate of a 3% cost increase when those members delay care.

  • Let’s start out with a sample size of 100 members.
  • If 42% of those 100 members have chronic conditions, that leaves us with 42 members.
  • Assuming 35% of those 42 members have difficulty paying, that comes out to 14 members.
  • For those 14 members who delay their care, expenses increase by 3%.
  • Assume spending of about $19,000 annually for each member; a 3% increase for those 14 members would total about $7,980 in extra spending for this population of 100 members.

Spread across the total population of 100 folks, that amounts to an added $6.65 per member per month (PMPM). Assuming an overall medical cost of about $450 PMPM across the population, that means — with corresponding decreases in premiums or member contributions to health plans. While that is a substantial reduction in medical costs, the solution itself cannot cost more than about $3.30 PMPM in order to generate a 2:1 ROI.

Done well, plan administrators can remove barriers to care that result in costly delays. When systems are in place to encourage more proactive healthcare, it becomes a lot easier for patients to act swiftly when their bodies’ respective check engine lights blink on.

The Business of Healthcare
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