Health, financial leaders discuss impact of out-of-pocket costs, offer solutions

In response to increasing out-of-pocket medical costs, Professor J. Michael Collins brought together various stakeholders May 16 to discuss the intersection of healthcare and financial capability. The workshop, Managing Out-of-Pocket Medical Expenses: How Well are Families Prepared for a World of High Deductibles, highlighted Collins’ survey of public employees with health plans through the Wisconsin Employee Trust Funds (ETF).

With support from the Herb Kohl Public Service Research Competition, Collins explored the real and perceived burdens of out-of-pocket healthcare costs and how they affect people’s use of health services. The workshop introduced stakeholders from health and financial systems to several potential tools that could help individuals and families better manage their out-of-pocket healthcare costs, and as a result, their health.

Collins’ survey found that most people significantly overestimated their out-of-pocket costs for even routine services. The results also show that the design of health insurance plans makes little difference in a person’s level of hardship; the person’s liquidity and savings correlated much more highly with the ability to pay for healthcare. One-third of survey respondents skipped recommended medical tests or treatments due to costs.

In addition to his La Follette School faculty position, Collins serves as director of UW–Madison’s Center for Financial Security, which recently received a five-year cooperative agreement with the Social Security Administration’s Retirement and Disability Research Consortium. Collins began the event by sharing his research and the results of the ETF survey.

The event featured Secretary Robert Conlin of the Wisconsin Department of Employee Trust Funds and Secretary Kathy Blumenfeld of the Wisconsin Department of Financial Institutions, who spoke about their agencies’ efforts to educate public employees on topics like benefits plans and financial literacy. They participated in a discussion with HJ Waukau (MIPA ’14), manager of advocacy and regulatory affairs for the Wisconsin Medical Society. Justin Sydnor, an associate professor with the Wisconsin School of Business, moderated the discussion.

The second panel, moderated by Professor John Mullahy of UW–Madison’s School of Medicine and Public Health, focused on educational and other interventions to support families as they navigate out-of-pocket expenses. Panelists were Allison Espeseth, managing director of Covering Wisconsin; Mary Hamman, associate professor of economics, UW–La Crosse; and Peggy Olive, financial capability specialist, UW–Madison Center for Financial Security and Division of Extension.

Hamman presented her research regarding the effectiveness of decision tools in helping people choose the healthcare plan that is most financially beneficial for them, while Espeseth and Olive discussed their experiences with insurance and financial literacy, including outreach strategies and effective ways to disseminate information.

The afternoon workshop – attended by 40 people – concluded with Karen Timberlake of Michael Best Strategies and Sydnor discussing the broader implications of systems change and how to successfully implement innovative solutions. Wisconsin Public Radio featured Collins’ research in this news story May 23.

Collins’ Kohl Competition Award also provided financial support for La Follette School graduate student Amy Fottrell, who served as Collins’ project assistant during the 2018–19 academic year. Fottrell received her bachelor’s degree in 2015 from Tulane University in political science, social policy and practice, and international development.

Before beginning her La Follette School studies, Fottrell founded Roots of Renewal, a nonprofit organization that provides construction-based job training, served as director of Poverty Stoplight New Orleans, was one of four social entrepreneurs accepted to the Sundance Institute’s and Skoll Foundation’s Stories of Change Lab to make a documentary on the barriers of poverty in the United States.

This summer, Fottrell is serving as an Urban Leaders Fellow at the Tennessee State Board of Education and the Tennessee Housing Development Agency.