EBRI Study Falls Short, Again

It gets tiresome to review Employee Benefit Research Institute (EBRI) studies of consumer-driven health programs, especially when they selectively use information to make a political point. In this case, EBRI wanted to conclude that consumer-driven health is no big whoop, which is probably an improvement over previous work that wanted to conclude consumer-driven health is a bad idea.

This version is an improvement in part because it at least gives a nod to some of the information coming from vendors. But this too is selective. For example, the paper concludes, “The studies agree that the use of preventive services did not change (upward or downward) as a result of the CDHP.”  Sounds definitive? But “the studies” examined are only three and they are pretty limited. One looked only at cancer screening among a population from 2001 to 2005. Another looked at only four employers. The final one was based on Aetna data with a large population base, but EBRI says it supports using an HRA instead of an HSA because “the findings support the case for cost sharing that varies with the effect of the use of the services on future costs and health.” Why variable cost sharing should work better with an HRA instead of an HSA escapes me, and EBRI doesn’t explain the thought. It is just one example of little toss-in digs that pepper the paper.

Omitted from consideration is a wealth of information from vendors like Blue Cross Blue Shield, CIGNA and others that indicate substantial improvement in patient behavior with a consumer-driven health plan. Now, granted these vendor reports are rarely published in peer-reviewed publications, but if the purpose of this paper is to compile “what we know about consumer-driven health plans,” one might think it would be worth including such information anyway.

Similarly, this paper omits any mention of one of the most rigorous studies done on the topic — The American Academy of Actuaries “Emerging Data on Consumer-Driven Health Plans,” published just a year ago.  This paper was peer reviewed by 33 actuaries who are named in the paper. On prevention, the AAA paper concluded, “All of the studies reviewed reported a significant increase in preventive services for CDH participants.” How EBRI can ignore such a finding is beyond me, and suggests that it is driven more by a political agenda than any effort to establish a real understanding.

The prevention section is a small part of the EBRI paper, but similar problems crop up throughout. Another example is the continued inclusion of a couple of studies that looked at Humana’s original experiment with HRAs in 2001. The Humana design of this product was just awful and the company had concluded it was a failure and completely redesigned the product even before the researchers wrote their papers. As I recall, there was no rollover allowed and cost sharing applied to only a limited number of services. To continue to use this research as an example of the problems with CD Health is simply dishonest. If anything, Humana’s experience should be used as an example of how real markets work. Something is tried out and evaluated. If it doesn’t work well, it is pulled back and remodeled based on what has been learned.

But so it goes in this era of political agendas trumping any honest attempt to understand and learn.

Comments (11)

Trackback URL | Comments RSS Feed

  1. Ken says:

    How many times do you guys have to say it. EBRI doesn’t like HSAs.

  2. Tom H. says:

    EBRI believes in private sector socialism. And if the truth be known, they probably believe in public sector socialism as well.

  3. artk says:

    I don’t see a pointer to the actual study you’re criticizing, just a pointer to a Heartland Institute article that references a press release. How about the actual study so we can decide?

  4. John Goodman says:

    We meant to add the links to the EBRI and AAA studies — just an oversight on our part. The links have now been added.

  5. Devon Herrick says:

    Studies of HSAs and CDHCs tend to look at whether people are reducing spending. They ask whether patients lower consumption of only wasteful spending. Especially the studies that Commonwealth is involved in lament the perverse financial incentives that might lead some people to forgo filling a prescription.

    These are all valid points for health policy wonks. However, the studies by left-of-center policy groups never seem to appreciate how empowering it is to control some of my own funds. They would rather have a third-party bureaucracy control all funds since third parties can be regulated and told what to do.

  6. John R. Graham says:

    I am losing confidence that Qualifying High Deductible Health Plans coupled with Health Savings Accounts are actually “consumer-driven health care”. I have the same skepticism about other so-called consumer-driven plans.

    Here’s why: I have a QHDHP and an HSA and am enrolled in a plan in the California small-group market. Until this year, I paid all medical costs up to the deductible. In 2010, the rates increased significantly and the carrier started covering more preventive care. I went for an annual physical (which I amd convinced I do not need) and did not pay one penny out-of-pocket. However, I am in the same “consumer-driven health plan” as I was in 2009.

    Because I have a contact at the carrier, I called him and asked why they had done this, well in advance of ObamaCare’s requiring coverage of preventive care. (Indeed, they changed it half a year before ObamaCare passed!)

    He said that the carrier was having trouble with brokers who were promoting benefits that coupled a high-deductible plan with an HSA/FSA/HRA but the employer did not deposit a fixed sum in the employees’ accounts. Instead, when an employee incurs a medical cost, he submits the claim to corporate accounting, which deposits that sum into the HSA/FSA/HRA and then the employee pays.

    Economically, this is a traditional PPO disguised as a consumer-driven plan. Employer gets a lower premium but claims experience is no different that traditional PPO. When carriers identified this, they tried to stop it by not paying commissions to brokers who promoted these arrangements, but they were difficult to identify and it was perhaps illegal not to pay commissions.

    So, this carrier (at least) threw in the towel and started covering preventive car and jacked up premiums. I cannot estimate how widespread this experience is, but I suspect it is a significant malformation of consumer-driven health care.

  7. Devon Herrick says:

    A year or more ago didn’t Greg report that some California insurers were trying to prevent HRAs from gaining a foothold by refusing to underwrite health plans where employers were reimbursing claims on high-deductible plans? I don’t recall the details, it might have been the brokers that were trying to pad commissions by steering employers to plans with lower deductibles.

  8. John R. Graham says:

    Greg Scandlen and I might be judging the information differently, or have different information about the same situation. There has definitely been conflict between brokers and carriers on this question. I think that I am more tolerant of the carriers’ version of the conflict than Greg Scandlen is.

    I may be wrong, but I don’t see why carriers would try to “prevent HRAs from gaining a foothold.” Brokers have told me that they do not like to sell consumer-driven plans because their commissions are a percentage of premium. So, they only sell CDHP when groups are at the end of their ropes and threaten to drop benefits because of cost. The choice is CDHP or nothing. In that case, I don’t see why the carrier would try to sabotage it.

    The only credible reason to quash commissions is that the broker has wrapped the CDHP in a HRA/HSA/FSA that actually indemnifies the patient from out-of-pocket costs, thereby retaining the incentives of a traditional PPO, IMHO.

  9. R. G. says:

    I wouldn’t pay too much attention to Greg Scanlen John R. Graham. Greg said is going [uninsured] and stop making HSA contributions because his semi-retired income isn’t large enough to benefit from the deposit. He says that if he does get sick, which he doubts [ha ha], he will just enroll into his state’s pre-existing plan and they will pay his bills.

    Notice to Greg: Don’t get cancer on the 16th of the month because you will have to wait 6 weeks for your new EFFECTIVE DATE on your pre-existing insurance. 6 weeks of cancer care could cost a bundle, say $100,000 or more.

    Greg thought he was going to enroll into the pre-existing plan on the way to the hospital and have an EFFECTIVE DATE that day like private insurance companies do today. Greg is wrong.

    10 days in the hospital can cost $100,000 today. 6 weeks in the hospital would cause major pain on semi-retired Greg’s checking account.

  10. Erik Ramirez says:

    I have clients who have Group HSA’s and pay the entire deductible for their employee’s. What is wrong with that? The employer gets a lower premium and the employee does not feel the pain of a high deductible so they will actually go to the doctor before a sickness becomes a disease. Win/Win. So far I have not seen a spike in utilization in these Groups.

    This is free enterprise at its best.

    Why should any insurance carrier care how the deductible if funded. They are paid on premium, not deductible (unless these plans were meant for under-utilization due to upfront costs). It is none of their business. It is legal and there are TPA’s that will administer these types of scenarios.

    Business men/women have found a way to increase benefits while reducing costs and the insurance company now wants a piece of that lower premium back. I have noticed that HSA prices have risen at the same time people are suggesting a better usage of medical dollars.

    So why are premiums going up?

  11. John Fembup says:

    “So why are premiums going up?”

    You have clients ??