AHIP's deceptive release on CDHC
New Study Shows Lower Costs, Increased Consumer Engagement in Account-Based Health Plans
HealthDecisions.org
October 23, 2007
HealthPartners today released results of a study that provide new evidence that members who have health savings accounts and health reimbursement accounts have lower medical costs and are more engaged in seeking out more cost effective care. The analysis shows that even when adjusted for illness burden, health care costs were 4.4 percent lower for HealthPartners members in these consumer directed health plans compared to members in traditional plans.
http://www.healthdecisions.org/HSA/News/default.aspx?doc_id=139052
Consumer Directed Health Plans Analysis
HealthPartners
October 2007
As demand for consumer-directed health care increases, this study adds to evidence from national studies about the impact of consumer-directed health plans. Several studies show that consumer-directed plans are associated with increased consumer engagement and lower costs.
CDHPs are associated with lower costs and more efficient care
The cost of care for members in CDHPs was more than 4.4 percent lower than the cost of care for members in traditional plans after accounting for differences in illness burden.
Cost of Care by Product:
$210 - HSA
$194 - HRA
$216 - Traditional without deductible
http://www.healthpartners.com/files/39058.pdf
Comment:
By Don McCanne
This study released by America’s Health Insurance Plans shows that consumer-directed health plans using health savings accounts are effective in reducing health care costs (confirming the theory that patient-consumers will be more careful in spending funds from their own health savings accounts).
Wait a minute. That’s what the press release would have you believe. But what did this study really show?
Individuals with their own health savings accounts (HSA) spent $6 less than those with traditional plan without a deductible (2.8% less). That’s not very impressive.
But what about those with health reimbursement arrangements (HRA)? The funds in those accounts revert to the employer if they are not spent by the patient-consumers. Under the consumer-directed theory, health care spending should not decrease under HRAs since it is not the patients’ money, and the employees would eventually lose access to the funds if they didn’t spend them. Yet those individuals spent $22 less (10.2% less). Both the HSA and the HRA products combined resulted in 4.4% decrease in costs, but the real savings was with the HRAs and not the HSAs.
So what is the conclusion? Patients who need care will freely spend their own money out of their HSAs, but they will hold back on care if its their employers’ money that they’re spending. This, of course, is the exact opposite of what this press release and the advocates of consumer-directed health care would have you believe.
Of course this is all nonsense. The real issue is that high-deductible health plans are replacing more comprehensive coverage, and these deductibles are making health care access less affordable. Hiding behind the rhetorical diversion over health savings accounts, to which two-thirds of employers don’t even contribute, hardly advances the cause of affordable, comprehensive health care for all.