The long-term success of consumer-driven health will be determined by several factors, experts say.
Consumerism in health care is now a permanent part of the benefits landscape, even if consumer-driven health plans -- in their current form -- ultimately go by the wayside, health experts say. Regardless of how plan designs evolve, it's likely the future of health insurance will include better-informed, more cost-conscious patients.
However, this scenario is based on the assumption that widely accepted, easy-to-use sources of information on provider cost and quality will emerge, that patients will take the time to research medical providers and treatment options, and that doctors will tolerate their new and many questions. It assumes no patient backlash against shouldering more medical costs.
It's too early to put CDHPs on a pedestal -- or to nail the coffin shut on them, as some would do -- but both advocates and critics generally agree they have significantly advanced the notion of patient as consumer.
"For too long, we've focused too much on the supply side, on the basis that health care was too complex for the average consumer to deal with," says Alan Spielman, president and chief executive of URAC, a Washington-based nonprofit that accredits health-care programs. "This consumerism . . . is fundamentally here to stay."
But, he adds, "We've got a large to-do list."
Patients themselves may decide if the new plans ultimately succeed or fail, experts say. Members of CDHPs and similar high-deductible plans are less satisfied with their health plans than members of traditional plans, according to a recent survey by the Employee Benefit Research Institute, a nonpartisan research organization in Washington, and the Commonwealth Fund, a private foundation in New York.
The study suggests a number of shortcomings in CDHPs. "If these problems are not fixed, consumers will ultimately reject the model, and the health-care system will move on to the next big idea," says Paul Fronstin, EBRI's director of health research and co-author of the study.
Skin in the Game
Many health experts agree that consumerism -- with or without a CDHP -- is a sound idea because it forces patients to consider the costs associated with medical treatments, unlike traditional health insurance plans.
"We have to have consumerism to change the market, to make it efficient and effective," says Dale Whitney, corporate health-care manager at Atlanta-based United Parcel Service. While UPS has no CDHP, it "believes very strongly in consumerism," Whitney adds.
Companies don't necessarily need a CDHP to foster health-care consumerism, he says.
"The key is [in] aligning your financial incentives" to reward healthy behavior, he says. UPS offers its employees a variety of health-information tools and services, including a Web-based application that lets them compare different health plans and choose the one that best suits their individual needs. The company also provides workers with a phone-based service that lets them discuss health-related concerns with nurses.
Given the right financial incentives and information, advocates say, patients will use the health-care system more appropriately. With more skin in the game -- i.e., a large deductible -- they'll seek preventive care to stay healthy, get medical care when they're sick and skip unnecessary services. As utilization drops, so will the rate of health-care spending.
That's the theory, and its practice isn't new. Indeed, tiered pricing for prescription drugs, which has been around since the early 1990s, has increased the use of lower-cost generic drugs. CDHPs apply the concept to all types of medical spending.
"Conceptually, it's very important to get consumers engaged. [The question is] how to do that so that we don't create economic barriers that reduce demand for necessary services," says Andrew Webber, president of the National Business Coalition on Health, a Washington-based employer group.
Despite the buzz they've generated, CDHPs still make up only a tiny share of the market. Only 2 percent of employers offer them, and 1 percent of all covered employees participate in them, according to Mercer Human Resource Consulting. They accounted for 2.5 percent of all commercial health premiums in 2005, according to a report from Seattle-based consulting firm Milliman. Their numbers are steadily growing, however: A recent survey of 585 large and mid-sized employers by Watson Wyatt Worldwide found the number of companies offering high-deductible health plans rose by 22 percent from 2004 through this year.
Critical Decisions, Little Info
A significant drawback to CDHPs is they require patients to make critical decisions about which doctors to visit and how much to pay without enough information, says Dr. Paul Tang, vice president and chief medical information officer at the Palo Alto Medical Foundation, a nonprofit physician practice located near San Franscisco.
"We have given patients choice without giving them information and control," he says. "You need to know information about yourself, knowledge on how to interpret that information and the criteria for making choices."
The EBRI/Commonwealth study found most health plans of all types do not provide enough cost and quality information. Many plans do offer hospital buyers' guides, provider directories, drug-price lists and other tools, but, for the most part, this data is neither detailed nor user-friendly enough to help patients compare doctors or decide which hospital to use for elective surgery, experts say.
Health plans could do more to mine and massage their own provider data, but often the information just doesn't exist, says Tang. "There are very few standardized measures to help people compare apples to apples," he says.
Despite advances in outcomes and performance measurement by the Leapfrog Group (a nonprofit health-care-measurement organization sponsored by large employers), the National Committee for Quality Assurance and others, it's just plain difficult to measure clinical outcomes in a standard way, to do it well for the myriad medical tests and procedures people receive and to customize it for specific patients, Tang and others say.
Another difficulty is that the "price" of medical care is not just the cost of one distinct office visit; it's the cost of a combination of medical care, tests, prescriptions and other items, much of which is unknown at the start. "We can't get that [information] now," says Joseph R. Antos, an economist at the American Enterprise Institute, a think tank in Washington.
Some say this medical-information mountain is too big to climb; others say there's been progress, with more to come. It may boil down to how willing patients are to invest the time and energy needed to use health-care information properly.
"I don't think the average consumer will ever be competent enough to make decisions about treatments," says Robert M. Crane, senior vice president of research and policy development at Kaiser Permanente, an 8.4-million-member health insurer based in Oakland, Calif. The best that can be hoped for, he says, is that patients will learn enough to ask their doctors if a procedure is necessary or if a cheaper treatment alternative exists. "It's going to add some tensions between physicians and patients," he adds.
The goal of consumer-driven health is not to turn Jane and John Doe into junior M.D.s, says Doug Kronenberg, chief strategy officer at Lumenos Inc., a 507,000-member CDHP provider based in Alexandria, Va. "Our goal is to give information so you can ask questions," he says.
Many observers expect health information to improve during the next several years. "We're nowhere close to where we need to be, but we're closer than where we've been," Webber says. "CDHPs will accelerate the improvement of these information tools. I think it'll get better over time."
Another, more controversial issue is the question of whether CDHP plan design prompts some CDHP members to avoid medical care. The concern is that limited spending accounts and high out-of-pocket deductibles will lead penny-pinching patients to skip the care they need, not just the unnecessary care CDHPs want them to reduce.
In the EBRI/Commonwealth study, 35 percent of CDHP members reported avoiding or delaying care because of costs, compared with 17 percent of those in traditional health plans. This behavior was especially noticeable among people with health problems or incomes under $50,000, suggesting that CDHP design hurts the most vulnerable patients.
The finding does not distinguish necessary from unnecessary care, but it seems to support the view that high-deductible plans best serve young and healthy people but do little to help older and sicker people, says Bill Vaughn, a senior policy analyst at Consumers Union, a nonprofit consumer-advocacy organization based in Yonkers, N.Y., and the publisher of Consumer Reports magazine. Many medical services are unplanned and expensive -- and unaffordable for those without more generous health coverage, he notes.
Health insurers say they see no disparity in the level of care for members of CDHPs and those in traditional plans, and other studies have shown that CDHP members pay more attention to healthy behaviors than non-CDHP members. It's possible to cut utilization and costs without compromising care by using generic instead of brand-name drugs and ensuring that patients do not pay out-of-pocket for cancer screenings and other preventive care, Kronenberg says.
Still, the potential of patients delaying or avoiding care for cost reasons is troubling. "If people are forgoing preventive care . . . because of cost issues, then the system will end up paying more in the long run," says Crane.
Sara Collins of the Commonwealth Fund asks, "For employers, is that going to mean a sicker employee down the line?"
L.H. Schellman, U.S. benefits manager for Procter & Gamble in Cincinnati, says the survey's findings "could indicate that safeguards may be needed to ensure short-term avoidance doesn't lead to long-term conditions that go under-treated or undetected."
The question is: What's necessary medical care and what's not? It's not always obvious to a patient embarking on a diagnosis or treatment. What is known is the routine care people with chronic conditions need. That's where health plans should focus their incentives, some say.
A partial solution is to expand covered preventive care to include maintenance drugs for people with chronic conditions such as diabetes and heart disease. "I would feel a whole lot better if CDHPs covered more robust preventive services," Webber says, because it would encourage chronically ill members to seek necessary care and lead to long-term savings.
Again, it may come down to how informed and nosy patients turn out to be. Not all are willing to take the bull by the horns and question doctors. Some want to but don't know how. "It's a great area of opportunity and potential improvement," says Alexander C. Domaszewicz, a principal at Mercer Human Resource Consulting in Newport Beach, Calif.
Some experts think the line between CDHPs and traditional health plans will blur. They see more structured CDHPs that maintain choice. Tiered-provider networks will allow people to pay more for higher-quality providers if they wish- -a ssuming data on provider quality comes up to par. It's a matter of "giving people structured choices" instead of a "free for all," says Sherry A. Glied, who chairs Columbia University's Department of Health Policy and Management.
Observers predict more cost-sharing, too, with members paying 20 percent of all costs instead of set co-payments and deductibles. Higher out-of-pocket costs will goad people who use a lot of care into making decisions more carefully, the American Enterprise Institute's Antos says.
In the end, the market--patients, medical providers, health plans and employers -- will decide how CDHPs fare. The key, Crane says, is to get everyone "rowing in the same direction," with incentives aligned for better health care delivered at lower costs.