You can get sophisticated surgery, with the most advanced devices in the world and the most famous doctors, for a small co-pay if you have the right insurance plan. Sounds great, right? But did you need all that? Would still want all of that if you had to stake your own money?
Conservative reformers say that if consumers have to spend their own money, they will forgo useless or unnecessary care and focus on the things that matter to them, such as quality, cost, or bedside manner. These reformers advocate for health insurance plans with higher deductibles or greater cost-sharing to subject health decisions to financial discipline. And while these ideas are generally touted as an alternative to the Affordable Care Act, high-deductible, low-premium plans are gaining in popularity as the law is implemented. It's just not clear that they are better at making patients more conscientious consumers of care than their lower-deductible counterparts.
High-deductible plans, typically defined as those with a deductible (the amount a patient has to pay out of pocket before the insurer steps in) in excess of $1,000, have sprouted in recent years. A paper by Katy Kozhimannil, a professor of public health at the University of Minnesota, and others published in the August issue of Medical Care estimates that 34 percent of insured working Americans have high-deductible plans, and that the number has tripled since 2008. With their lower premiums, the plans are attractive to employers and patients, who save money each month—as long as they don't have to seek expensive medical care. The new Obamacare insurance marketplaces, which give consumers the ability to shop for health coverage online, are projected to further the proliferation of high-deductible plans for the same reason.
As you'd expect, increasing the cost of care does decrease consumption. An April report from Massachusetts' attorney general describes a Blue Cross Blue Shield analysis of the patients in its high-deductible plans. Their use of health care services decreased between 1 and 5 percent, depending on their deductible, from 2008 to 2010, and they used more preventive services and cheaper generic prescriptions. That's exactly how cost-sharing plans are supposed to drive behavior.
But preliminary data from 2010 and 2011 for two other health plans in Massachusetts revealed that, when adjusted for health status, the costs of high-deductible plans overall were actually higher than standard plans. The report doesn't make clear why this might be the case and urges further study. But some health policy experts say such higher costs could be the result of patients putting off necessary care and allowing health problems to fester, necessitating more pricey treatment in the end.
Kozhimannil examined how men and women in high-deductible plans in New England used health care between 2001 and 2008. Women reduced the number of emergency-room visits for low-severity problems (say, a flu) by approximately one-quarter, but maintained rates for intermediate- and high-severity issues. Men, on the other hand, reduced all emergency-room visits, while decreasing high-severity emergency care the most, by nearly one-third.
The study says this is "consistent with the hypothesis that men who transition to [high-deductible plans] may forego needed care ... resulting in delays or increased severity of illness when care is later sought."
Another study by Harvard Medical School professor J. Frank Wharam and others, published in the August issue of Health Affairs, found that poorer patients in Massachusetts also reduced high-severity visits by as much as one-third in a given year. The high deductibles were discouraging the most necessary care.
Despite these early concerns about high-deductible plans, some aspects of their philosophy, if the plans proliferate as expected under Obamacare, might nudge patients into being savvier health care consumers. Hard data—for price and for quality—are currently lacking, making shopping around difficult. What standardized quality measures there are can be misleading: A hospital that does poorly on one indicator (say, death after surgery) may have very unhealthy patients rather than a problem with its care. The metrics and in-depth reviews that are available in many areas of the economy are generally unavailable within the health care system.
As Obamacare contributes to the rise of high-deductible plans, it might push regulators to make this data available. Indeed, a few states have taken action on price transparency in response to recent health reforms. North Carolina and Massachusetts each passed bills mandating that hospitals publish the prices they negotiate with insurers, which might help patients select affordable care.
Making more and better data available to consumers has the potential to change the health care system for the better. High-deductible plans, with their focus on consumer choice and expected growth under the health reform law, could encourage that to happen.
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