New Study Shows Lower Costs in Consumer-Driven Plans--But the Findings Won't Settle the Debate Over Just How Effective C-D Plans Are

HealthPartners, a highly regarded not-for-profit Minnesota health plan, has issued an important report on its consumer-driven care book of business. It includes Health Savings Accounts (HSAs) and Health Reimbursement Accounts (HRAs).

Their findings include:

• After adjusting for "illness burden," HealthPartners found that heath care costs were 4.4% lower for members in a consumer-driven plan compared to its traditional co-pay-style plans.
• "Researchers found the lower costs were driven by CDHP [consumer-driven health plan] members receiving care from lower cost providers and that providers used fewer resources such as diagnostic imaging and other procedures."
• "The rate of preventive care services [at Partners] was nearly the same among members in CDHPs and traditional plans."
  
• "Members with CDHPs were more likely to use Web-based tools that provide information on health care costs and quality."
• "Members in CDHPs appear to be significantly healthier." They "were expected to use 28% fewer health care services compared to members enrolled in traditional plans."
• "CDHP members are slightly younger."
• Consumer-driven plans are more popular among mid-size companies. About 70% of the CDHP market at Partners is in the individual, 1-500, and 500-1000 employee market.

My sense is that this very well presented study doesn't provide any surprises. Consumer-driven care does save some money--only about 4% in this case--and is inhabited by people who think they can beat the system--the very healthy.

The good news is that at Partners the people who use these plans are making good use of preventive care and health information tools--there is no evidence that the quality of care is less.

I have always felt that consumer-driven care offers consumers incentives to use care more efficiently--especially for first dollar kinds of services and drugs. However, I have never seen CDHPs providing those financial incentives in any kind of effective way for those who incur the vast majority of health care costs--the very sick who blow past their deductibles and into the full pay areas. An overall 4% savings is what I would have expected in this context.

I have also repeatedly warned employer benefit managers who self-insure to be careful in how they design these plans because they have the potential to draw the healthiest people out of the employer pool leaving a disproportionately expensive remnant group and a higher overall program cost for the plan sponsor. The data on just how much healthier the consumer-driven group is only re-enforces that concern.

I was disappointed to see that the study, "excluded catastrophic claims above $100,000 to reduce random variation." That may make statistical sense but I would have hoped they could have found a way to investigate the contention that the bigger the claim the smaller the impact CDHPs has on cost management.

Thanks to HealthPartners for this valuable information.

You can download their PDF here.