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Consumer-Directed Health Isn’t Always So Healthy


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Giving health consumers more skin in the game doesn’t always lead to them making sound health decisions.

Over four years in consumer-directed health plans, enrollees used one-quarter fewer visits to doctors every year and filled one fewer prescription drugs. CDHP members also received fewer recommended cancer screenings, and visited the emergency room more often.

These rational health consumer theory-busting findings were published in the June 2013 issue of the Health Affairs article, Consumer-Directed Health Plans Reduce The Long-Term Use of Outpatient Physician Visits And Prescription Drugs by Paul Fronstin of the Employee Benefit Research Institute and colleagues from IBM and RxEconomics, a health policy consulting firm.

These results were derived from a study of medical claims from employees working in two manufacturing companies who were continuously insured between January 1, 2006 and December 31, 2010.

Health Populi’s Hot Points: Designing health plans that are both truly consumer-directed and nudge people to make good health care utilization decisions requires a better understanding of what motivates people to seek care beyond the immediate and short-term cost dimension. While health care appears to be morphing into a consumer product based on the growing out-of-pocket costs, the product and its end-use implications are more complex than buying a razor or washing machine.

“The plan’s incentives should support health improvement and the use of high-value care that could reduce future care needs,” the authors say, quoting Regina Herzlinger, a godmother of consumer-directed health.

The two main barriers to optimal results in CDH are that:

1. People don’t have comprehensive and understandable information to help them make these decisions

2. High deductibles can motivate people to avoid necessarily health care services and products to save money.

More employers, large and small, are offering CDHPs in and beyond 2013. CDHPs will also be prevalent plans on health insurance marketplaces in 2014, selling especially to newly-insured people who aren’t as health plan literate as their peers who have been selecting health plans from employers in the past couple of years.

CDHP members need to better understand the tradeoff between using the deductible and health savings account for buying current health services to save money on future (presumably more expensive) health services. Furthermore, CDHP providers should artfully design front-end prevention into the plans by heavily subsidizing (or discounting to zero dollars, making free) targeted prevention and wellness services that channel people into self-care and early diagnosis early and sooner.

More Blog Posts by Jane Sarasohn Kahn

author bio

Jane Sarasohn-Kahn is a health economist and management consultant serving clients at the intersection of health and technology. Her clients are stakeholders in health, including providers, payors and plans; companies in biopharma, medical devices, financial services, technology and consumer goods, non-profits and NGOs.  She blogs on HEALTHPopuli , where this blog originally appeared, and you can follow her on twitter at @healthpopuli.

Tags for this article:
Health Care Cost   Pay for your Health Care   Health Care Quality  

Comments on this post
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Dee Bonney, M.D. says
July 4, 2013 at 10:03 AM

What a great post. I couldn't agree more. While I think patients should be involved more in their health-care decisions, they have to be educated about medicine and health. I work in an ER, and I see patients sometimes demanding extra testing. It often doesn't contribute to their care. If docs would advocate more of educating the population ahead of time, I think consumer-directed health plans would both improve health and save money.

I wrote a recent post about this very concept:

I always prefer my patients participate in the decision about the care they receive, but as you point out, they need to be well-informed to do so.

Great article.

Jane says
July 10, 2013 at 6:52 PM

Your lede seems to assume that fewer drugs and fewer screenings equals unsound health decisions. Many of the "recommended cancer screenings" turn out to have dubious value, and their frequency might be reduced (maybe even to zero) with a net population benefit. Skipping a few might be very sound. Many pharma drugs are prescribed with to patients for whom there is little evidence of benefit, and complaints of side effects often go ignored. Many patients really do feel better when they pop fewer pills, and terming that an "unsound" decision appears almost to be an effort to substitute your values for theirs.