Psychiatric News September 17, 2004
Volume 39 Number 18
© 2004 American Psychiatric Association
p. 8
Consumer-Driven Health Plans Not Total Answer to System Fix
Kate Mulligan
Consumer-driven health care plans can save money for the young and
healthy, but according to one economist, they do not help resolve basic
problems of the health care system.
Preliminary evidence about the impact of consumer-driven health care plans
raises "significant concerns" about their capability "to
address high costs, quality-of-care issues, and other fundamental problems of
the health care system," according to health care economist Karen Davis,
Ph.D.
Davis, who is president of the Commonwealth Fund, wrote an "Issue
Brief" about the subject and a commentary, which appeared in a special
issue of Health Services Research in August on consumer-driven health
care. The special issue is a compilation of articles from the conference
"Consumer-Driven Health Care: Evidence From the Field," sponsored
by the Robert Wood Johnson Foundation's Changes in Health Care Financing and
Organization Initiative and the Commonwealth Fund.
The assumption behind consumer-driven health care plans is that patients do
not sufficiently consider financial costs in their decisions about medical
care. By transferring some financial risk to them while also providing
financial incentives, plan designers hoped that the use of marginal or
unnecessary services would be reduced and that patients would be motivated to
seek lower-cost providers.
Most interest has centered on combining a high-deductible health insurance
plan with a health reimbursement account (HRA) to cover part of the
out-of-pocket expenses (for example, $500), wrote Davis. Typically, the unused
balance in the HRA for a given year can be carried into the next year.
Other consumer-driven products involve the provision of tiered systems of
care, with variable cost sharing for different providers, and of tiered
premiums, with varying degrees of benefit comprehensiveness.
The impetus for their development was the concern of employers about the
rising cost of health care.
Davis wrote that studies have confirmed that "when consumers face
higher cost sharing, they consume fewer services."
But, she argued, studies also show that cost sharing reduces the likelihood
of "receiving effective medical care, particularly for low-income
children and adults."
Cost sharing has reduced the use of both "essential and less
essential" prescription drugs, according to studies.
Employers typically offer employees a consumer-driven plan as one option
for insurance coverage. Since the plan offers financial incentives for low or
no use, it is not surprising that "healthier, higher-income individuals
are more likely to enroll [in these plans], leaving sicker and lower-wage
employees in higher-cost alternatives."
Davis noted that 10 percent of individuals account for 69 percent of health
care costs.
Consumer-driven health care plans likely cannot resolve major problems
associated with rising health care costs in the system as a whole, because
they generally are ineffective in curtailing costs for this population,
according to Davis.
Davis described five steps toward achieving a high-performance health
system that "focus on identifying, demanding, and rewarding performance
from providers, with positive incentives for consumers taking a complementary
role" (see box on page
8).
The brief, "Will Consumer-Directed Health Care Improve System
Performance?," and related papers are posted online at
<www.cmwf.org/programs/insurance/healthservicesresearch_index.asp>.
Related Article:
-
Other Options To Control Costs
Psychiatr News 2004 39: 8.
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