By Melinda Beeuwkes Buntin, PhD; Amelia M. Haviland, PhD; Roland McDevitt, PhD; and Neeraj Sood, PhD
The American Journal of Managed Care
March 2011
The effect of enrollment in high-deductible health plans (HDHPs) or consumer-directed health plans (CDHPs) on healthcare spending and on the use of preventive care was assessed across multiple employers, insurance carriers, and plans in a 2-year retrospective study.
* Families enrolling in HDHPs or CDHPs and firms offering HDHPs or CDHPs spent less on healthcare.
* Significant savings were realized only for enrollees in plans with deductibles of at least $1000, and savings decreased with generous employer contributions to healthcare accounts.
* Enrollment in HDHPs or CDHPs was associated with moderate reductions in the use of preventive care, despite the fact that these plans waived the deductible for preventive care.
http://www.ajmc.com/publications/issue/2011/2011-3-vol17-n3/AJMC_11mar_Buntin_222to230
Comment:
By Don McCanne, MD
The Affordable Care Act has established silver or bronze plans, with low actuarial values of 70 or 60 percent respectively, as the new standard for plans to be offered in the insurance exchanges. Since the plans will have to provide a mandated basic level of benefits, it is inevitable that they will have to include high deductibles since an average of 30 to 40 percent of the costs of health care will to be shifted to the patients to pay out of pocket. Is the wholesale adoption of high-deductible health plans a wise policy decision?
This new RAND study of over 800,000 families with employer-sponsored health plans showed that deductibles of $1000 or more do result in lower total spending, but also result in lower use of important preventive services, specifically immunizations and cancer screening. (As an aside, this study also shows how commonplace high-deductible plans have become in the employer-sponsored market as well.)
This study does have limitations. It was a two year study of the healthy workforce and their young healthy families during a healthy period in their lives. It was too short to measure differences in outcomes, and no attempt was made to do so. For our purposes, we can assume that the reduction in the use of preventive services serves as a proxy for what might be predicted when patients are not taking full advantage of the health care opportunities available to them.
The landmark RAND Health Insurance Experiment (RAND HIE) had previously shown that cost sharing resulted in a decline of both beneficial services and services of questionable value. In a press release announcing this new RAND study, co-author Amelia Haviland stated, “We discovered that costs go down dramatically during the first year people are enrolled in high-deductible health plans, as long as the deductible is at least $1,000 per person. But we also found concerning reductions in use of preventive care. This suggests people are cutting both necessary and unnecessary care.”
We do need to be concerned about costs, but there are many different policies that can control costs. Any policy that reduces spending by reducing beneficial services that patients should be receiving is bad policy. High-deductible health plans represent bad policy. They should be eliminated.
It is particularly annoying to hear policy experts say that we can’t control costs unless we put patients in charge of spending their own health care dollars, as if that were the only cost reduction tool available. Here’s what the authors of this study have to say:
“Employers often make contributions to personal medical accounts to provide incentives to employees to switch to high-deductible plans, as high enrollments are necessary to capture substantial cost savings. Some have posited that such contributions would reduce the cost savings of HDHPs (high-deductible health plans) or CDHPs (consumer-directed health plans which are HDHPs with health savings accounts) by undermining consumer cost sensitivity. However, this was not the case for HDHPs or CDHPs with moderate employer contributions. These HDHPs or CDHPs seem to reduce spending as much as plans with similar deductibles but no employer account contribution.” (High employer contributions also reduced spending, but not as much.)
Instead of erecting financial barriers to beneficial health care services, we need to erect a financing infrastructure that blocks spending on wasteful administrative excesses and non-beneficial services, while promoting access to appropriate health care. The single payer model is designed specifically to get patients the care that they need while eliminating wasteful spending.