New research suggests that high-deductible health plans could encourage patients across all income levels to cut back on needed care.
High-deductible health plans have been shown to reduce consumer spending, and have been touted by HHS Secretary Tom Price. During a congressional hearing last month, Price said high-deductible or "catastrophic" plans are a big component of what should replace the Affordable Care Act (ACA). He added that health savings accounts and high-deductible catastrophic coverage "make a whole lot of sense for many individuals."
Such plans are growing more popular. According to Paul Fronstin, director of the health research and education program at the Employee Benefit Research Institute, about 25 percent of employees currently have health plans with a deductible of $1,000 or more, which is up from 4 percent a decade ago. High-deductible plans are also popular on the ACA's insurance exchanges, the Washington Post reports.
However, Marketplace reports, a new consensus is forming among health care researchers that while high-deductible plans with lower premiums could be a good option for people who are typically healthy, they can be disastrous for those who are sick or have low incomes.
According to Amitabh Chandra, an economist and health care researcher at Harvard University, high-deductible plans drive patients to shop for treatments, generally without information on price and quality. "Simply calling the patient a consumer doesn't make buying health care anything like buying cars and computers," she said.
Further, Chandra's research has demonstrated that even individuals with higher incomes do not always shop efficiently for health care. "Prevention, imaging, or drugs—consumers were cutting back on all those. And that's a sign they don't really know what care is valuable and what care isn't valuable," she said. Moreover, Chandra said there was "no evidence that consumers were learning to price-shop after two years of high-deductible coverage."
More broadly, according to the Post, research going back to the 1970s shows that "when consumers must spend a big chunk of their own money on their care, they can cut back by as much as 15 percent."
A doctor's experience
To see how high-deductible plans worked in practice, Ashish Jha, a physician and health policy professor at Harvard, enrolled his family in one—and learned three key lessons:
- First, although the plan's high deductible did prompt him to shop for health care based on cost, doing so was difficult in practice, Jha wrote in an essay for STAT News. "My insurance company's online tool was hard to use and, even as a physician, I could almost never guess what sets of services a visit to the doctor might generate," he wrote, adding that the tool also did not include any useful quality information.
- "The second lesson was that being a health care consumer is stressful, at least the way the system is currently set up," Jha writes. For instance, Jha explained that he has heart condition that occasionally causes his heartbeat to spike. He experienced an unusually long episode recently—putting him at risk of a heart attack—but he decided not to go the ED because the visit would have cost at least $2,000 and Jha's family plan had a $6,000 spending cap before coverage took effect. Jha was fine, but he acknowledged that he would have advised a patient in the same situation to go to the ED.
- And that's the third lesson, "the lesson of what didn't happen—I didn't really have a choice of where to go for treatment," Jha wrote. He explained that his choices were either to forgo care or go the ED, which is typically quite costly, and that a lower-cost alternative would have enabled him to readily seek care. "All I really needed was a place that had a heart monitor and that stocked common, inexpensive rhythm-restoring heart medicines," he wrote, adding that the "real cost" of such treatments should have been between $200 and $300. But because there was no such option, Jha didn't seek treatment.
Jha's "major takeaway" from his experience is that "simply asking people to pay out of pocket for their health care doesn't create a health care marketplace." Doing so, according to Jha, will involve creating new care delivery models and loosening scope of practice regulations so that providers such as nurses can play a larger role in providing care. There also must be expanded access to cost and quality information, he added.
"If we continue with high-deductible health plans the way they exist today...at best, we'll have a health care system that might save a little money—but at the risk of harming the health of our citizens," Jha concludes (Gorenstein, Marketplace, 1/18; Jha, STAT News, 2/6; Gorenstein, Washington Post, 2/7).
10 ways to compete for high-deductible patients
Rising health care costs, the proliferation of high-deductible health plans, and greater levels of transparency and choice are pushing consumers and employers to become more active health care purchasers.
Explore 10 tactics top providers are using to develop a customer-focused growth strategy and compete in the emerging retail market.
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