Medicare Compliance & Reimbursement

High-deductible plans have reduced medical costs but may encourage penny-pinching to a fault, studies suggest.

The divide that separates proponents of "consumer-driven" health care from traditional plans' staunch defenders grows wider by the day.

Three recent studies have shed new light on consumer-driven health plans' cost benefits. First-time CDHP beneficiaries have generated an 8-percent reduction in medical costs--all while making positive changes in health behavior, such as increasing their use of medications to treat chronic health care conditions, according to a Feb. 2 study from CIGNA Choice Fund. "This early data suggests that the change in health care decision-making encouraged by a consumer-driven plan doesn't end once a consumer satisfies the deductible or reaches the out-of-pocket maximum," says Michael Showalter, vice president of consumerism for CIGNA HealthCare.

But critics of consumer-driven health care are quick to point out that consumers' cost savings come at the expense of their own quality of care. Two additional studies give weight to these concerns.

4 Fundamental Flaws Plague Consumer-Driven Health Care

There are four key reasons that consumer-driven health care isn't a good idea, the Center For American Progress asserts in a recent report.

First and foremost, consumer-driven health care "denies people the health care choices they really want," the center alleges. While 63 percent of benes in traditional plans are satisfied with those plans, only 42 percent are satisfied with their high-deductible, savings-account based health plans, finds a new "Consumerism in Health Care" survey from the Employee Benefit Research Institute and the Commonwealth Fund.

Medicare Part D's broad plan spectrum and consumer cost-sharing aspects represent another example of benes' dissatisfaction with consumer-driven care, notes CAP. "[E]arly experience has shown that 'choice' means confusion, unreliable information and continued high prices as seniors struggle to find plans that meet their needs," CAP remarks.

Second, consumer-driven health care discourages preventive and cost-effective care, disputes CAP. In an effort to reduce their out-of-pocket costs, consumers could become more likely to avoid preventive care as a cost-saving measure. "Skipping preventive services or skimping on drugs that manage chronic conditions could lead to higher overall health costs," the center points out. In addition, nearly 70 percent of the current system's costs are for the top 10 percent most expensive people, notes CAP. "These people's costs are well above the deductible, so a high deductible won't change their behavior."

CAP's third complaint is that consumer-driven care "assumes people use health care like they buy commodities." The problem with this methodology is that providers have as much to do with determining consumers' health care needs as consumers do themselves. Most tests, drugs and service use result from provider recommendations, not consumers' desires, notes CAP. Plus, when consumers' lives--or their loved ones' lives--are on the line, consumers with severe conditions are more likely to choose treatments based on quality rather than economy.

Lastly, consumer-driven care does more harm than good, CAP argues. "Consumer-driven health plans shift costs from the healthy to the sick, undermine group health insurance and allow prices to rise unchecked."

CDHPs do foster cost-consciousness among consumers--possibly to the point of avoiding care they would have received in a comprehensive health plan, the center says. But CDHP enrollees are, on the whole, healthier than benes in other plans, CAP points out. If traditional plans continue to lose their healthier individuals to CDHPs, they'll become too costly for workers and employers to afford, the center contends.

'Consumerism In Health Care' Survey Reveals Benes' Discontent

In addition to significantly lower satisfaction levels among benes in high-deductible plans, the EBRI/ Commonwealth Fund survey makes several observations that could impact the industry's perception of CDHPs' success. Despite all the buzz, only 1 percent of benes with private insurance currently have CDHPs. Higher out-of-pocket costs, more missed health care, greater cost-conscious behavior and under-informed decision-making accompany low levels of satisfaction with these plans, the survey finds.

Nearly one-third of consumers in CDHPs spent 5 percent or more of their income on out-of-pocket costs and premiums during the past year, the study reveals. In contrast, only 12 percent of benes in comprehensive plans spent the same amount or more. Just 17 percent of benes in traditional plans made conscious decisions to avoid or delay care, but CDHPs drove twice as many benes to skip out on care because of costs, the survey says.