High Deductible Health Plans are not the solution. It is not the patient who can manage health care. New study finds skimping on preventive care.

doctor_patient_mri_woman_lg_clr — I have a high deductible plan, just scan my lower half

The debate has raged on for years, but the High Deductible Health Plan lives on and grows. There is good reason for that. Giving a family a two, three or four thousand dollar deductible is going to save money. At a minimum it will potentially save the difference between the old and new deductible, that is simple math. Employers that claim significant savings from consumer driven plans do so in a clouded context. Generally, the plan is offered as an option and naturally the people with the lowest expenses will enroll in that plan to save on premiums. Sometimes the employer does not count its contributions to a health savings account (HSA) as part of the cost of health care. And as I have said, higher out-of-pocket costs will always save money. That is why employers are continuously raising deductible and co-payments and coinsurance.

But what else does it do? Well it makes it more difficult for lower-income people to obtain any health care. As the study below shows it apparently inhibits use of preventive services including obtaining childhood immunizations. It likely inhibits use of more modest services like office visits too. It does one other thing that impacts all of these. It scares the crap out of people.

If you believe that all this makes for a wise, discerning health care consumer capable or willing to take the risk of determining what is and is not necessary health care, you must also believe Americans have saved sufficiently for a secure retirement.

Let’s look at this logically. Does it matter whether I have a $500 deductible or a $5,000 deductible? If the idea is to get me to think about using health care, that means I have to think about the small stuff before I think of the big stuff. So the key is to keep me from entering the system. That means I think twice about going to the doctor, an office visit or perhaps a questionable trip to the emergency room. A five hundred dollar deductible will do that very well for most people because they are on the hook for the $75.00 or a bit more. But once I am in the system and the doctor suggests an MRI or writes a script or orders a stress test what do I do?

“Doc, can you send me to the least expensive facility for the test?” “Do you really think I need that scan?” “Let me think about it for a few weeks and I will get back to you.” Suddenly because I pay more of the cost I am qualified to assess the medical necessity of a procedure? I know, I won’t fill the prescription and just wait for a few days to see if this hacking cough goes away. My quest to preserve my HSA account balance automatically removes my emotional attachment to my health, my body, my life? I don’t think so.

I will tell you without any scientific study of any kind that a person faced with a serious illness or even possibility of such an illness for himself or a loved one does not think about the cost of care or much else except the words coming out of the doctors mouth. That is why the key to managing costs is not the consumer, but managing the care that is provided. Clearly the patient, and the provider have little concern for the cost of care. Given that is not going to change, and even if it did it would not affect the provision of necessary health care (let’s hope), that is why the key to managing costs is not the consumer, but managing the care that is provided.

What is needed far more than creating additional financial stress for people is a more coordinated, efficient delivery system starting with a larger role for the primary care physician. A good delivery system should assure the delivery of necessary and appropriate health care and no more. That is not the job of the patient beyond the first office visit. It is also not the job of the insurance company.

Instead of always trying to modify the payment mechanism, we must focus on the delivery system. I have heard doctors state quite clearly not to worry about the cost, your insurance or Medicare will pay and pay they will. So who should be at risk for ordering duplicative or unnecessary tests or care that is unjustifiably inconsistent with protocols or largely defensive? It sure as heck isn’t the patient.

Largest Study of High-Deductible Health Plans Finds Substantial Cost Savings, but Less Preventive Care

March 25, 2011

The largest-ever assessment of high-deductible health plans finds that while such plans significantly cut health spending, they also prompt patients to cut back on preventive health care, according to a new RAND Corporation study. The findings are published in the March edition of the American Journal of Managed Care.

Studying more than 800,000 families from across the United States, researchers found that when people shifted into health insurance plans with high deductibles, their health spending dropped an average of 14 percent when compared to families in health plans with lower deductibles.

Health care spending also was lower among families enrolled in high-deductible plans that had moderate health savings accounts sponsored by employers. But when employer contributions to such savings accounts accounted for more than half of an individuals deductible, savings decreased among families enrolled in these so-called consumer-directed health plans.

However, over the same period, families that shifted to high-deductible plans significantly cut back on preventive health care such as childhood immunizations and cancer screenings.

“We discovered that costs go down dramatically during the first year people are enrolled in high-deductible health plans, as long as the deductible is at least $1,000 per person,” said Amelia M. Haviland, a study co-author and a statistician at RAND, a nonprofit research organization. “But we also found concerning reductions in use of preventive care. This suggests people are cutting both necessary and unnecessary care.”

Researchers examined the experiences of families insured during 2004 and 2005 through one of 53 large employers, with about half of the employers offering a high-deductible or “consumer-directed” health plan. Previous studies have tracked the impact of high deductibles, but the evidence has been limited to the experience of a few plans and employers.

High-deductible and consumer-directed health plans have been gaining favor as one way to help control health care costs. By 2009, about 20 percent of Americans with employer-sponsored health coverage were enrolled in such plans. A 2010 survey found that more than 54 percent of large employers offered at least one high-deductible health plan to their employees.

Health care reform is expected to further encourage enrollment in high-deductible health plans as such plans are expected to be a key offering in the insurance exchanges being set up in many states to help the uninsured find health coverage.

The RAND study found that overall, health costs grew for people enrolled in both high-deductible and traditional plans. However, they grew more slowly in the high-deductible group. Among those with high-deductible health plans, spending was lower on both inpatient and outpatient medical services, as well as prescription drugs. Spending for emergency care did not differ.

Researchers found that individual deductibles must be rather high to achieve meaningful cost savings. Cost growth for families covered in plans with moderate deductibles—from $500 to $999 per person—did not differ significantly from those in traditional plans. Cost savings only became significant when deductibles exceeded $1,000 per person.

But as families reduced their medical spending, they eliminated some care that is clearly beneficial, researchers observed. While childhood vaccination rates increased among families in traditional health plans, they fell among families in high-deductible health plans. Rates of mammography, cervical cancer screening and colorectal cancer screening also fell among those with high-deductible health plans relative to those in other plans.

“We saw that patients reduced preventive care, and if this persists, it is likely to have health consequences in the future,” Haviland said. “These cutbacks could cause a spike in health care costs down the road if people end up sicker and need more-intensive treatment.”

The drop in preventive care happened even though the high-deductible plans in the study waived the need to pay a deductible when receiving such care. This suggests that enrollees in high-deductible plans either did not understand this part of their policy or some other factor discouraged them from getting preventive care, Haviland said.

The finding about preventive care has implications for adoption of national health care reform in the United States. Under the federal Patient Protection and Affordable Care Act, health plan deductibles must be waived for preventive treatments. Researchers said the new study suggests that this fact must be clearly communicated to the public to meet the goal of increasing the level of preventive care received by Americans.

Haviland said that although the RAND study is the largest study of high-deductible plans to date, it only tracks family experiences over the first year of enrollment. Different patterns may emerge in subsequent years.

“There’s general agreement that the U.S. health care system needs to reduce costs while maintaining quality,” Haviland said. “We found that at least in the short run, high-deductible health plans are providing the desired reduction in costs. But they are also discouraging families from getting the preventive care they need.”

Support for the study was provided by the California HealthCare Foundation and the Robert Wood Johnson Foundation. Other authors are Melinda Beeuwkes Buntin of RAND, Roland McDevitt of Towers Watson, and Neeraj Sood of RAND and the University of Southern California.

RAND Health, a division of the RAND Corporation, is the nation’s largest independent health policy research program, with a broad research portfolio that focuses on health care costs, quality and public health preparedness, among other topics.