Hospitals, health plans, and healthcare reform advocates all talk a lot these days about the engaged healthcare consumer—the one with skin in the game who approaches healthcare purchases with the same money-saving zeal as a coupon clipper in a supermarket.
But how hard will the average consumer work to trim a healthcare bill? It’s one thing to save money by purchasing a less expensive brand of tuna fish, quite another to score a deal on a mammogram.
For more than a decade, consumer- directed health plans (CDHPs) have been touted as a way to give the consumer some control over healthcare spending decisions. How effective has this model been?
A group of researchers at RAND Health has been looking at how CDHPs affect healthcare spending. They’ve released three reports so far, and each one has provided another piece of the puzzle to help understand how healthcare dollars are spent. While their research shows that CDHPs reduce healthcare spending, there is also evidence that those cuts have come at the expense of necessary care, not from consumers shopping more prudently for healthcare services.
The first report, released in March 2011, looked at the effect of high-deductible plans on spending. In a study of more than 800,000 families, the researchers found that people in high deductible plans spend less money on healthcare. That’s the good news. But they spend less money because they forgo preventive healthcare such as childhood shots and cancer screening. Oops, there’s the bad news.
The second report, released in April 2011, looked at the effect of high-deductible plans on the medically vulnerable. It found that people with chronic health problems or low incomes are no more at risk to reduce needed healthcare than anyone else.
The third report, out this month, looks at the effect of high-deductible plans on spending for an episode of care—the set of services required to manage a specific medical condition over a certain period of time. The good news from this study is that people always look for ways to conserve their healthcare dollars. The bad news is that, once again, one of the ways they save is by avoiding preventive care.
The episode of care for a broken wrist includes the ER, x-rays, doctors, and rehabilitation services. The researchers discovered that once care is initiated—the ER visit for that broken wrist, for instance—patients still have some control over how much they spend on healthcare services and they still find ways to save money on that episode of care.
How? Amelia Haviland, the study’s lead author and a senior statistician at RAND, explains that patients trim costs in three ways: they use fewer name-brand drugs, see fewer specialists, and limit their hospital stays.
“Unfortunately,” said Haviland in a telephone interview, “that only happened about one-third of the time. Usually patients achieved a savings during an episode of care by receiving less care.” So, in the case of that broken wrist, maybe a patient would go for five sessions of physical therapy instead of 10.
Haviland says more studies are planned to determine the extent to which necessary medical care is sacrificed for cost savings. But for now this CDHP research project presents troubling news for the triple aim of healthcare reform—better care, better health, and lower cost. Everyone, especially employers and health plans, should stop and think about such lofty expectations. Is the fabled consumer who will use the power of the marketplace to reduce his healthcare bill in fact a myth?
It’s important that all parties take a hard look at how cost-cutting and care-cutting play out in high-deductible health plans. Healthcare reform is expected to further encourage enrollment in these plans, which will probably be among the key offerings in health insurance exchanges. That could translate into millions of new enrollees who might not receive the medical care they need.
Consider the example of the episode of care for a broken wrist once more. Assuming that each physical therapy session is billed at $120, then the patient could save $600 by forgoing five sessions. But what are the long-term costs? Nerve damage? Limited use of that hand? Maybe health insurers, lawmakers and employers need to stop talking about lower healthcare costs to the exclusion of the other two parts of the triple aim. Better care and better health offer a sustainable way to control healthcare costs. That’s the message consumers need to hear.
Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
