Early returns suggest that “consumer-directed” health plans can restrain health care costs and utilization, but whether these high-deductible plans can accomplish this without deterring consumers from seeking needed care is still up for debate. So state economist Melinda Beeuwkes Buntin and colleagues at RAND in an article [2-week free access] published today on the Health Affairs Web site and reported in today’s Washington Post. In one of the lead papers of a seven-article Health Affairs package [2-week free access] on consumer-directed health care (CDHC), published with the support of the California HealthCare Foundation (CHCF), Buntin and coauthors also find that enrollees in consumer-directed plans tend to be healthier and wealthier — although not younger — than enrollees in more traditional comprehensive plans.
Surveying the available evidence, Buntin and coauthors estimate that moving all privately insured nonelderly Americans into consumer-directed plans — which they define as plans having deductibles of at least $1,000 — could result in a one-time reduction in the use of medical care of about 4-15 percent. However, consumer-directed plans are often coupled with tax-favored personal spending accounts such as health savings accounts (HSAs) and health reimbursement arrangements (HRAs), which in effect decrease the cost of medical care below the deductible amount. These accounts could offset by as much as half the reduction in use and spending from high-deductible plans.
“On balance,” the RAND researchers conclude, “early evidence suggests that CDHC may help lower costs and lower cost increases,” even accounting for findings that enrollees in consumer-driven plans enjoy modestly better health and higher incomes than enrollees in more comprehensive plans. However, “claims that CDHC will encourage patients to reduce inappropriate and unnecessary use instead of making indiscriminant cuts are more problematic.”
The 1974-82 RAND Health Insurance Experiment (HIE) [2-week free access] found that increased cost sharing prompted consumers to forgo appropriate and inappropriate care alike — although with no apparent adverse health impacts — but Buntin and coauthors point out that “changes have occurred since the HIE that might promote more-appropriate care choices among consumers who have financial incentives to choose wisely.” For example, many consumer-directed plans waive or reduce the deductible for preventive care, and these plans often provide financial incentives for consumers to enroll in disease management programs, health-risk appraisals, and wellness initiatives.
Moreover, while price and quality information is still sparse for consumers and physicians, new information sources are appearing, and there are indications that enrollees in consumer-driven plans are using them: Aetna indicates that its CDHC enrollees access information at twice the rate of enrollees in traditional plans. Crucial to the future of CDHC, Buntin and her colleagues say, will be the success of public policies to promote the use of information technology in health care and to develop reliable and standardized performance measures.
For more discussion of this study, by Jonathan Cohn on The New Republic blog “The Plank,” click here.