Consumer-Driven Health Care: Is the Glass Half Empty?
Each December for the past few years, the Employee Benefit Research Institute (EBRI) has produced a survey of consumer engagement in health care. This year’s survey (previously reported here) found consumer-driven health plan (CDHP) enrollees were nearly twice as likely to have used an online cost tracking tool offered by their health plan compared to enrollees in traditional health plans (20% vs. 11%). CDHP enrollees were 56% more likely to have used a budget to manager medical expenses for the year (25% vs. 16%). CDHP enrollees were also 16% more likely to have asked for a generic drug. These are the type of activities that a more engaged consumer might take.
Yet, a recent post by Jane Sarasohn-Kahn at The Health Care Blog decided the data proved the glass was half empty rather than half full, stating… “No relationship was found between either HRA/HSA account balances or rollover amounts with respect to cost-conscious behaviors.”
There are numerous reasons for rolling over an account balance or not accumulating balances. People in poor healthy would naturally fund their account more anticipating medical need. It makes sense that some people in good health or who engage in healthy behaviors may not deposit as much money into their account and would not roll funds over (or might even spend funds on non-medical needs).
I’m not sure why Jane Sarasohn-Kahn though account balance rollovers was a was the best way to determine how well CDHC is working? I tend to rollover balances because I’m frugal with my purchases. But many people may take out HSA funds as non-medical expenses and pay the penalty.
The “cost conscious behaviors” cited in this study are pretty limited. Is it possible that people with high balances don’t check hospital quality ratings because they haven’t been hospitalized? Or that they don’t ask about generics because most physicians automatically prescribe them?
No matter how good the news, there will always be group of critics who will search for something bad to report.
BTW, EBRI has never been a fan of HSAs. But I guess you all know that.
I second Jeff’s thoughts on this post.
The percentage of people engaged in these behaviors is very low. Not much saving if you can only 20% of people to act like they are concerned about costs.
Steve
Steve, if 20% of people are concerned about costs producers will pay attention. Not everybody clips grocery coupons or compares prices across stores, but because some people do, grocers are keenly aware that they have to remain competitive, advertise their prices, and check on what their competitors are doing.
The variables in question are confounded by the fact that neither EBRI, the employer, the insurer, nor the HSA bank know how the patient is paying his bills. People who know how to use their HSAs know that one should not pay out of the HSA for medical costs if one has after-tax cash flow available. Better to let the HSA balance compound. So, looking at the HSA balance in isolation tells us nothing about health spending on a current-year basis.
BTW, the criticism often hurled at HSAs – that they are merely another tax-deferal tool for high earners, is more likely to become true under Obamacare, which makes us launder more of our money through insurers for first-dollar coverage.