There's little doubt that years of ballooning healthcare costs have spurred employers to move away from generous insurance benefits toward plans that call for patients to shoulder a greater share of their medical costs. But two studies released last week indicate there's still little consensus on what the ultimate effects of this coverage shift will be.
While one study indicates that consumer-driven plans are prompting patients to save money without compromising their health, the other suggests that the new plans could make it much tougher for many Americans to receive and pay for the medical care they need.
"There's still a lot of speculation and anticipation, if not to say hype, over consumer-directed health plans and whether this paradigm will prove successful," said Paul Mango, head of the North American payer-provider practice at New York-based management consultant McKinsey & Co.
Consumer-driven health plans typically pair a high-deductible insurance policy with a savings account that employees can tap to cover out-of-pocket medical costs. The idea is to put consumers in charge of their own healthcare dollars, prompting more frugal spending (March 10, 2003, p. 30). Skeptics fear the concept could backfire by discouraging patients from seeking necessary care.
According to America's Health Insurance Plans, the number of consumers covered by HSAs alone has more than doubled to 1 million since September 2004. An additional 3 million to 4 million Americans are enrolled in similar account-based plans known as health reimbursement arrangements, experts estimate.
And early adopters are already seeing promising results, McKinsey researchers say. In a survey of 2,500 commercially insured adults, McKinsey found that while consumer-driven plan members were just as likely as traditional policyholders to seek medical treatment for serious conditions, they were twice as likely to forgo care for non-serious or "nuisance" conditions. And among respondents who sought care over the prior year, consumer-driven plan members reported being three times more likely to have chosen a less extensive and less costly treatment option, such as visiting an urgent-care center instead of a hospital emergency room.
A separate study by the New York-based Commonwealth Fund, however, suggests that HSAs and other high-deductible arrangements could lead to a rise in the number of "underinsured" Americans who face many of the same problems as the uninsured-namely, difficulty receiving and paying for care. The underinsured were defined as people whose deductibles exceed 5% of their income or whose medical expenses amount to at least 10% of their income (or 5% for low-income adults).
A survey of 3,293 adults found that 54% of the nation's 16 million underinsured went without at least one of four needed medical services in the previous year, twice the rate of those with more comprehensive benefits. Thirty-eight percent chose not to fill prescriptions; 32% opted not to see a doctor for a medical problem; 30% skipped tests, treatment or follow-up care; and 18% went without needed care from a specialist. The problem was even more acute among underinsured adults with chronic conditions, with 64% having forgone care because of cost.
The consumer-driven trend could knock many more Americans into the underinsured segment because the plans rarely adjust cost exposure relative to income, said Sara Collins, senior program officer for the Commonwealth Fund and co-author of the study. Industry research shows that HSAs carry average annual out-of-pocket limits of $2,857 to $6,639-amounts that could be financially burdensome for those with low incomes, she said.
Not so, say the authors of the McKinsey study. According to their research, consumer-driven plan members got annual check-ups, basic lab tests, mammograms and prostate exams at an equal or higher rate than those covered by traditional plans, and were 20% more likely to join company-sponsored wellness programs.