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Research Results and Policy Context: Consumer-Driven Health Plans: Potential, Pitfalls, and Policy Issues

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Research Results and Policy Context

Research Results

Meredith Rosenthal, Ph.D. and colleagues at the Harvard School of Public Health examined the prevalence and the typical benefit structure of consumer-driven health plans (CDHPs) in the market. In a series of 13 case studies, Dr. Rosenthal investigated the primary motivation for, design and early experience of early adopters of CDHPs. Early adopters reported favorable cost savings for CDHPs and there is no evidence of dramatic reductions in service use or increases in adverse health consequences. These reports are consistent with findings that CDHPs do not require substantial new cost sharing, as compared with alternative plans offered by the same employers.

Stephen T. Parente, Ph.D. and colleagues’ work at the University of Minnesota explored the medical service use and expenditures of employees enrolled in a consumer-driven health plan. Findings from his study highlighted the experience of early adopters from the employer and employee perspective. Key findings are that physician visits and pharmaceutical use and costs were lower in the CDHP group, as compared with other groups. Parente's most recent findings have focused on pharmacy costs. Early evidence suggests that overall costs in consumer-driven plans are less than in a PPO, but greater than in an HMO. Findings also suggest that brand name drug use is higher in CDHPs, but overall cost is lower. Study findings may shed light on the likely impact of 3-tier drug formularies.

Judith Hibbard, Dr.P.H. and colleagues at the University of Oregon explored the validity of assumptions about consumer behavior underlying consumer-driven health plans. The key assumption she examined is whether consumers will take charge of their health and health care and make cost-effective choices if they are given financial incentives and information to support their choices. Working with Definity Health Plan and the Whirlpool company, Hibbard compared the knowledge, use of information, satisfaction with care, cost-effective utilization, and cost of care for groups enrolled and not enrolled in a consumer-driven plan. She discussed early survey data from her project.
 

Policy Context

These studies provide the latest evidence on CDHPs in today's marketplace and address issues for public and private policy. What is the cost sharing experience of CDHP enrollees and how does that experience inform the current debates surrounding health savings accounts? To what extent will evidence exploring the relationship between CDHPs and pharmacy costs shape drug formularies going forward? What information are consumers really likely to use in making their decisions about care? What do employers need to consider as they explore new models? As purchasers and regulators, what do states need to know as they play an active role in their markets?

The moderated policy discussion began with comments by Paul Fronstin, of the Employee Benefit Research Institute, and Scott Leitz, of the Minnesota Department of Health. Fronstin and Leitz reacted to the research findings, placing them in a “real world” context. They also discussed the implications of the research for the private market and state and federal policy. Finally, Fronstin and Leitz explored what this research means in the context of increased availability of, and interest in, account based consumer-driven health plans. Following the moderated discussion, participants in the Cyber Seminar were able to ask questions and make comments online through the virtual chat room.
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