Consumer-Driven Plans Reduce Costs, Raise Questions
Consumer-driven health plans can help employers reduce health care costs but might lead some patients to forgo necessary care to save money, according to a study by RAND, the Washington Post reports. For the study, published on Tuesday in Health Affairs, researchers examined dozens of previous studies on consumer-driven plans -- both with and without health savings accounts, which allow consumers to set aside money tax-free for medical expenses.
Consumer-driven plans, which account for about 3% of the private health insurance market, have lower premiums than HMOs and PPOs but have higher deductibles -- typically $1,050 to $2,000 for an individual and $2,100 to $4,000 for families, compared with an average $220 deductible for traditional employer-sponsored plans.
According to the RAND study, most employers offering consumer-driven plans save at least 10% on health care costs. Some employers save as much as 25%, although the study notes that some of the perceived savings could come from shifting costs to employees.
Employees and dependents enrolled in consumer-driven plans without HSAs spend approximately 4% to 15% less on health care than those in traditional plans, while those in plans tied to HSAs spend about 2% to 7% less, the study found. Some of the savings are the result of plan members spending less money on unnecessary care, such as not going to the emergency department when it is not required. Other savings were the result of plan members forgoing necessary care, according to the study.
The study also found that employees who switched to consumer-driven plans tend to have higher incomes and better health than those in traditional plans. This disparity was "modest" but "warrants monitoring," according to the study.
In addition, the study found that there is a lack of useful and consistent information about the cost and quality of health care. The study recommends that the federal government establish standard quality assessment measures and remove legal barriers to pooling data from private insurers.
Lead author Melinda Beeuwkes Buntin, an economist at RAND, said, "The evidence is really mixed. There are some studies in which people are reporting that they don't fill a prescription or they don't get follow-up that's recommended by a doctor. So those two things would be cause for concern." She added, "I don't think these plans can be a panacea" for rising health care costs, "but they could, if well-designed, be one part of the strategy for rationalizing our system of health insurance."
Ron Pollack, executive director of Families USA, said consumer-driven plans discourage patients from getting necessary care, attract the healthiest individuals away from traditional insurance plans and favor wealthy individuals who receive the largest tax breaks from HSAs. Pollack said the plans will do little to reduce costs because 85% of U.S. health care spending is on catastrophic and end-of-life care, which are covered by the plans. "Every few years people are looking for a magic bullet to deal with costs," he said, adding, "And this bullet results in the shooting of a dud" (Lee, Washington Post, 10/24).