Last month, the Centers for Medicare and Medicaid Services (CMS) released data showing that total national health spending increased by less than 4 percent in 2009 and 2010, the slowest annual pace in five decades. Writing in the New York Times (“In Hopeful Sign, Health Spending is Flattening Out”), Annie Lowrey discusses factors contributing to this trend. Many experts point to the weak economy as a chief cause. As workers have lost jobs and health insurance, demand for medical care has fallen. Patients may be postponing appointments and other medical needs due to the out-of-pockets costs in this difficult economic climate.
There is consensus among experts, however, that there are other contributors besides the economic downturn. Some data shows that health care itself is changing, and that patients and providers may be modifying their behavior. For example, there has been a drop in spending on hospitalized seniors, whose Medicare coverage was not affected by the recession.
In addition, many experts point to the growth in recent years in high-deductible health plans (HDHPs). In these types of insurance plans, consumers typically have lower premiums but pay more expenses out of pocket. This insurance design naturally leads consumers to think twice before using health services, thus potentially lowering spending. However, research has shown that enrollees may also cut back on cost-effective preventative care, such as vaccinations.
While the growth in these HDHPs may be contributing to reductions in national health spending, questions remain as to their long-term cost-effectiveness if patients forgo essential care. Additionally, these plans may create special burdens for patients with low incomes and chronic conditions. HCFO-funded research offers insights into the features of HDHPs and their unintended consequences:
1. Study of the Effects of High-Deductible Health Plans on Families with Chronic Conditions (February 1, 2007-July 31, 2009), Alison Galbraith, M.D., Harvard Pilgrim Health Care. This project analyzed the impact of high-deductible health plans on families who do not have a choice in health plans. The researchers examined the effect of high deductibles on family health care decision making strategies, unmet health care needs, and the financial burden for families relative to that of traditional plans. They also explored whether one family member’s health or resource use influences that of other family members, particularly when one member has a chronic condition. The objective of the project was to inform policymakers about the potential advantages and disadvantages of high-deductible plans for families dealing with chronic conditions, especially when they have no choice in health plans. To date, this grant has produced two publications:
• Galbraith, A.A., et al. Delayed and Foregone Care for Families with Chronic Conditions in High-Deductible Health Plans, Journal of General Internal Medicine, Online First, January 2012. The objective of this study was to evaluate whether families with chronic conditions in HDHPs have higher rates of delayed or forgone care due to cost, compared with those in traditional health insurance plans. Galbraith and colleagues’ mail and phone survey used multiple logistic regressions to compare family-level rates of reporting delayed/forgone care in HDHPs vs. traditional plans. They selected families with children that had at least one member with a chronic condition. The primary outcome was report of any delayed or forgone care due to cost (acute care, emergency department visits, chronic care, checkups, or tests) for adults or children during the prior 12 months. Among families with chronic conditions, reporting of delayed/forgone care due to cost is higher for both adults and children in HDHPs than in traditional plans. Families with lower incomes are also at higher risk for delayed/forgone care.
• Galbraith, A.A., et al, Nearly Half of Families in High-Deductible Health Plans Whose Members Have Chronic Conditions Face Substantial Financial Burden, Health Affairs, Vol. 30, No.2, February 2011, pp. 322-3. High-deductible health plans—typically with deductibles of at least $1,000 per individual and $2,000 per family—require greater enrollee cost sharing than traditional plans. But they also may provide more affordable premiums and may be the lowest-cost, or only, coverage option for many families with members who are chronically ill. The researchers surveyed families with chronic conditions in high-deductible plans and families in traditional plans to compare health care–related financial burden—such as experiencing difficulty paying medical or basic bills or having to set up payment plans. Almost half (48 percent) of the families with chronic conditions in high-deductible plans reported health care–related financial burden, compared to 21 percent of families in traditional plans. Almost twice as many lower-income families in high-deductible plans spent more than 3 percent of income on health care expenses as lower-income families in traditional plans (53 percent versus 29 percent). The researchers concluded that as health reform efforts advance, policy makers must consider how to modify high-deductible plans to reduce the financial burden for families with chronic conditions.
Other related work includes:
Sources of Health Care Cost Growth
Grantee Institution: Stanford University School of Medicine
Principal Investigator: Laurence Baker, Ph.D. and Anne Royalty, Ph.D.
Grant Period: March 1, 2008-November 30, 2010
The Incidence of Financing National Health Spending
Grantee Institution: Georgia State University Research Foundation, Inc.
Principal Investigators: Patricia Ketsche and E. Kathleen Adams
Grant Period: March 1, 2009-August 31, 2010
The Impact of Multiple Consumer Driven Health Plans Beyond Early Adoption: Here to Stay or Market Fad?
Grantee Institution: University of Minnesota
Principal Investigator: Stephen Parente, Ph.D.
Grant Period: December 1, 2004-March 31, 2008
How Valid are the Assumptions Underlying Consumer Driven Health Plans?
Grantee Institution: University of Oregon
Principal Investigator: Judith Hibbard, Dr.PH
Grant Period: May 1, 2004-January 31, 2008