I was unable to attend the rest of the National Consumer Driven Healthcare Summit; had to jet off to Phoenix to talk about drugs. But not to worry, the good people putting on the Summit posted the presentations so I was able to download and read them at 35,000 feet somewhere over Texas.
And boy was I rewarded.
The first presentation I leafed thru was by someone from the Galen Institute, a very conservative think tank type-organization apparently populated solely by folks coming from or headed to the Heritage Foundation, American Enterpriise Institute, or the University of Chicago’s school of economics.
It reminded me of a paper done by someone in a hurry to “just get the damn thing done”; light on substance, lots of white space, unsupported claims and conclusions without basis.
The presentation cites studies from McKinsey and Assurant Health and Cigna and AHIP that provided glowing, albeit not terribly detailed or comprehensive or specific or peer-reviewed, statistics revealing the rapid growth, democratic nature, and promise of CDHPs.
One of the opening slides had a picture of Old Glory on it; what exactly the flag has to do with CDHPs I’m not sure, but it is election season so perhaps it indicates that consumer directed health plans come right after baseball hotdogs and apple pie. Or maybe I’m reading too much into it.
Well, after reviewing that presentation, I was ready for meatier fare. And Karen Davis’ presentation was certainly all that. Ms. Davis, of the Commonwealth Fund, presented data from studies by several non-partisan groups, including the Kaiser Foundation, Employee Benefits Research Institute and her own organization.
Here’s where real research and careful analysis helps us to put the growth of CDHPs in perspective. For example, of all the people who joined employer-based high-deductible health plans, less than half had a choice. And the ones who were enrolled were less satisfied with their coverage; only 8% of those enrolled in regular comprehensive coverage were not satisfied, compared with over 25% of those enrolled in CDHPs. Why were they less satisfied? Well, their out of pocket costs were much higher and they were less satisfied with their choice of doctors.
Not surprisingly, CDHP enrollees also were more likely to delay or avoid getting health care due to cost. While that is not necessarily a bad thing, an earlier study indicates this can contribute to higher costs over the long term due to poor compliance with chronic care treatment. Over a quarter of those with deductibles over $1000 didn’t fill a prescription due to cost, 19% did not see a specialist, and 26% skipped a recommended test or treatment or follow-up visit.
Perhaps the biggest problem, and the one most “real”, is that many of the people with high-deductible plans don’t have enough in their HSA accounts to pay their health care costs up to where their insurance kicks in. That’s why 20% of the people with deductibles over $1000 were unable to pay medical bills, and 17% had to change their way of life to pay medical bills.
There’s way more substance here, which I’ll get to soon. My takeaway so far? If the CDHP advocates want to make a strong case for their version of health care, they better do a much better job than they did in Washington this week.
And congrats to Ms. Davis, who Aced the course with a well-researched, carefully put-together, and highly substantive presentation.
You are to be commended for articulating an alternative viewpoint to those who have drunk the CDHP Kool-aid!
I recently attended a business meeing in S. Calif focussed on CDHP. The exuberance and platitudes of the speakers failed to articulate how CDHP addresses cost, quality and access, or how individuals with lower incomes can afford payment into an HSA, let alone the high deductibles. When questioned on the availability of information/data to make informed provider decisions the responded that this was still a work in progress and it will come in time. Sort of like buying a brand new car and being told you’ll have to wait a couple of years for the transmission!
I note that Medicare Part B has a very low deductible of $125, 20% co-pay for covered charges and no out of pocket maximum. Large numbers of seniors buy Medi-gap policies to cover what Medicare doesn’t. I wonder what would happen if Part B were redesigned to require a deductible of, say, $1,000 per person and an out of pocket maximum of $2,500. Presumably, seniors could still buy Medi-gap policies to cover what Medicare doesn’t. I bet we would be surprised at how many decide to absorb their out of pocket exposure themselves. For those who can’t absorb a deductible that high or afford to buy a Medi-gap policy, we could offer means tested financial assistance.
The CDHP industry is clearly immature. The economic basis for it certainly exists–health costs are essentially still uncontrolled (beyond provider compensation) and health plans are frankly out of ideas. What bothers me the most is that the description “CDHP” is a misnomer: I don’t see much of what I’d really call ‘consumer-directed’ in the structure of the information, processes, or responsiveness on the system’s side.
What I do see is more “consumer DIRECTIVE” behavior on the part of plans, with elaborate information-gathering and data-management strategies to identify–as they must, from their perspective–those consumers with emergent or pre-emergent chronic disease. These folks are going to be responsible for 80-95% of future costs, so it’s clearly to their business advantage to try to head diabetes, heart disease, and other lifestyle-mediated risks off at the pass.
Critics of CDHP products and concepts have worried about the impact on a number of things, including risk pools, alienation/marginalization of subscribers on the bubble of affording care, etc. And they’re all right. Things are going to change.
What I see as a more important consideration is what’s going to happen as two trends play out: the increasingly dire situation of health costs pricing more and more employers out of the market for sponsored benefits, and the developing ‘retail consumer healthcare marketplace’. The two trends will influence each other in ways that have yet to be fully clear. But what seems to be true is that I don’t think you can shift costs more and more to consumers, demand responsibility and force accountability on them without at the same time seeing consumers begin to aggregate into a ‘self aware’ buying force that starts, at some point, to make new demands on the marketplace.
What this means, I think, is that consumers will at some point wake up to what’s happening, and when they get over being furious they’re going to shrug and change health care. Forever and in ways health care can’t change itself.
At that point I believe we’ll see what ‘consumer directed health plans’ really look like. And I doubt they will look much like the pale products of health plans’ limited imagination we currently see.