Consumer-directed health care: One step forward, two steps back?

TABLE 2
Qualified CDHC medical coverage beyond traditional services

Public opinion generally unfavorable

A recent survey by the Kaiser Family Foundation found that 73% of respondents with employer-sponsored insurance had an unfavorable view of a health plan that combined an HDHP with an HSA, and 78% said they would feel vulnerable to high medical bills with this type of coverage.⁶

Iimplications of cdhc

Advocates of CDHC believe the financial disincentives of co-pays and high deductibles will encourage consumers to reduce their use of marginal services and to seek lower-cost, higher quality providers. They cite early studies showing CDHC participants decreased their use of certain medical services while increasing their use of preventive services and maintaining a balance in their HSA from one year to the next.¹

Opponents of CDHC emphasize research that shows patients who pay more of their health care bills consume less care, including essential care. The RAND study of the 1970s confirmed that greater cost-sharing by patients reduced the chance they would receive effective medical care. This was particularly so for low-income patients. A recent study showed that increased medication cost-sharing led patients to stop using important drugs like statins and ACE inhibitors.⁷

How accessible/usable are health data?

Herzlinger cites informed consumer choices as a strength of the CDHC concept. However, the amount of information on cost and quality of health care is limited, albeit growing. More worrisome perhaps, there is little evidence that most patients can use this kind of information to make good health care decisions.

Who would benefit, who would not?

Another concern is that HDHPs and HSAs will more likely appeal to healthier, well-off people who can take full advantage of the tax incentives and more readily fund their accounts. If a significant number of consumers in this group moves toward CDHC plans, it would leave more unhealthy people in the traditional insurance system. This, in turn, would lead insurers to increase premiums for those less healthy consumers, thus making their insurance more expensive and, ironically, increasing the numbers of uninsured. CDHC plans may also appeal to the uninsured and those who have difficulty paying the usual health insurance premiums. This group is likely to have more difficulty fully funding their HSAs and, consequently, they will need to pay more of their deductible costs out-of-pocket, which can create a disincentive to seek needed care.

In an alternative analysis of CDHC, Robinson sees HSA products representing an evolution from collective insurance in which those in good health help finance the care of unhealthy enrollees with high expenditures (traditional health insurance with its “use it or lose it” design) to one in which unspent balances are retained by healthy enrollees rather than diverted to pay for the care of others (an HSA account with its “use it or save it” design).

In this scenario, healthy (and often well-off) consumers are favored by low-premium, high-deductible products. The savings are also financially protected from chronically ill users who would pay more in deductibles and coinsurance. The negative consequence is further diminishment of the already fragile social pooling effect of the current health insurance system and the potential for increasing the plight of the uninsured and underinsured.⁸

While it is likely that CDHC will attract more participants, it remains to be seen whether the public will support the concept if reports start appearing of significant numbers of patients refusing recommended services when faced with high deductibles and large out-of-pocket costs. CDHC will likely look attractive to healthy and well-off consumers, but its ability to control costs and improve quality in our already stressed health care system is suspect.

Correspondence
Eric Henley, MD, MPH, 1601 Parkview Avenue, Rockford, IL 61107. E-mail: ehenley@uic.edu.