As insurance exchanges emerge next year, and as states grapple with exactly what options health plans will provide, high-deductible health plans (HDHPs) are likely to be on the menu. But do such plans have the secret sauce to move participants from being passive health care consumers to savvy shoppers?
HDHPs have grown steadily in recent years. A 2012 report by America’s Health Insurance Plans estimates more than 13.5 million people are enrolled in high-deductible health plans with health savings accounts. Even in California — where benefit-rich HMO plans continue to have loyal followers — more than half of those who purchase insurance in the individual market report buying a plan with a deductible greater than $500.
To learn how HDHPs affect the health care marketplace and individual buyers, the RAND Corporation, with support from the California HealthCare Foundation and the Robert Wood Johnson Foundation, completed a large, five-year study of the effects of HDHPs on consumer use of, and spending on, health care. The analysis found that during the first year following enrollment, members of HDHPs had fewer hospitalizations than patients enrolled in traditional plans. They also had fewer episodes of care, fewer visits to specialists, and lower use of brand-name drugs — all of which reduced overall costs. However, there also was one troubling finding: Those in HDHPs cut back on preventive services along with other services. For example, cancer screenings in the first year of enrollment declined by 3 percent to 5 percent – even though such services were covered at 100 percent and not subject to deductibles.
The RAND study was summarized in the May issue of Health Affairs. The article suggested that growth of HDHPs to one-half of all employer-sponsored insurance (from 13 percent as of 2010) could save as much as $57 billion annually.
As with most projections, however, there are assumptions inherent in this estimate. For such savings to be achieved, and sustained, consumers must be both motivated and have the necessary tools to “shop”. Unfortunately, a recent Lake Research Partners survey found that only 38 percent of California participants in HDHPs reported that they have ever searched for information about the cost of a test or treatment (compared to an even more disappointing 26 percent of consumers in other types of plans).
In a market with a dizzying array of products that are poorly labeled, with no clear explanations of benefits, no published prices, and no way of assessing the quality of different manufacturers, is it surprising that consumers rely on intermediaries — usually their doctors — to navigate their health care decisions?
Here are the ingredients we need to add to the mix:
Understanding benefit design. At a minimum, patients need to know which services are covered under their plan and whether costs incurred will be applied toward their deductible. Fortunately, the ACA provides for a uniform approach to describing benefits through the Summary of Benefits and Coverage (SBC). The SBC seeks to provide standardized information – presented in a simplified, easy-to-access way — to help consumers understand coverage limits and estimated costs. Consumers Union and the National Association of Insurance Commissioners (NAIC) already have provided prototypes and user testing results to help shape such tools.
Understanding price. Price is still one of the most opaque areas in health care. Surveys consistently find that consumers say they want price information, but when it comes down to it, they cannot often find it. A few states (e.g., New Hampshire) have taken steps to fill this void with pricing tools drawn from All Payer Claims Databases. Some health plans have also recently launched tools for their members. To be effective, such tools have to provide specific pricing information at the individual provider level, with health plan-specific negotiated rates.
Understanding options. Also crucial for patients is reliable information about the risks and benefits of comparative treatments, and their relative value. On this front, the Patient-Centered Outcomes Research Institute (PCORI) is working on improving understanding of treatment options for both patients and their providers.
When patients are knowledgeable about the risks, benefits, and value of treatments — particularly for elective procedures — they are better positioned to ask appropriate questions about their care options and take part in decisions about the course of their care. Such collaboration not only leads more readily to the type of care that patients actually want, but also to lower costs.
A Final Word
The research on HDHPs shows that rising enrollment correlates with declining per-capita health care spending. What is not yet clear is whether this is a first year phenomenon or a true bending of the cost curve. Regardless, everyone has a stake in ensuring that HDHP cost-savings reflect a decrease in inappropriate and unnecessary care, rather than forgone preventive and primary care.
High-deductible plan enrollment will continue to grow, and there is much work yet ahead to better educate and support consumers as they position themselves at the health care table.