Patient Power Works: Significant Savings for Employers and Beneficiaries
We previously discussed the executive summary of CIGNA’s 8th annual Choice Fund experience study, which reports outcomes from 2.6 million beneficiaries of CIGNA’s consumer-driven employer-based health plans (that is, plans which are paired with a Health Savings Account or Health Reimbursement Arrangement). CIGNA has just released a much more detailed presentation of the results.
The presentation clarifies that the improved outcomes control for health status. That is, they compare “apples to apples”, and the results are not due to healthier people choosing consumer-driven plans and sicker people staying in traditional plans. Newly shared outcomes include:
- Choice Fund customers increase their compliance with recommended care in the second year, even more than in the first year;
- They improve their health-risk status by six percent;
- Medical cost trend goes down 12 percent versus traditional plans;
- The improvement persists over time, up to $7.900 savings by fifth year;
- The improvement occurs in low-risk, medium-risk, and high-risk patients; and
- Because employers contribute to HSAs and HRAs, employees spend less money out of pocket than peers in traditional plans!
Choice Fund customers increase their compliance with recommended care…; They improve their health-risk status by six percent.
This is a positive outcome.
CDHC opponents often lament that high-deductible plans could in theory lower health status with perverse incentives. The RAND HI Experiment found otherwise. The bottom line is: does the health plan save money? In this case it does.
Critics and advocates of CDHC waste a lot of time bickering over whether enrollees forgo care that’s necessary or unnecessary. I don’t believe there is a fine line. It takes a lifetime of good or bad behaviors to affect a change in health status. What this also means is that the marginal cost of achieving that extra week of life with medical intervention throughout life is extremely high. Basically, if a consumer decides to forgo an extra doctor visit because of the cost; if the same patient is slow to refill a cholesterol medication because of the cost, it likely doesn’t make much difference in the long run. In other words, being 100% compliant versus 90% does not reduce longevity by 10%. But it may deduce spending by 10%.
“Because employers contribute to HSAs and HRAs, employees spend less money out of pocket than peers in traditional plans!”
This is a big one. Especially since costs are increasing for employees quickly. Just shows how efficient consumer driven plans are.
Since their are such significant benefits to be had with plans that are consumer driven, it doesn’t make sense why traditional plans are still attractive to employers.
Shocking that consumer driven health plans actually work!
It probably is shocking to the bureaucrats who think a top-down driven system that gives patients less choice is preferable to a more free-market system. But it shouldn’t be. HSAs are superior to such systems because they put more decision-making power in the hands of the patients. http://www.doctoroz.com/videos/benefits-health-savings-account?page=2
For whatever reason bureaucrats think that individuals do not want choice, or they don’t understand that more choice means affordability.
“The presentation clarifies that the improved outcomes control for health status. That is, they compare “apples to apples”, and the results are not due to healthier people choosing consumer-driven plans and sicker people staying in traditional plans.”
The importance of this can’t be stressed enough. Since results aren’t biased by an individuals health status, we see the success of the plans.
“They improve their health-risk status by six percent”
This is probably because, unlike Obamacare, these HSAs are not forcing people to choose between treating themselves on the Internet (which may lead to more risk) and going in to see their doctor if there is a real concern.
Or that HSAs help consumers pay for care and ObamaCare only provides expensive care with limited choice.
Here is a good John Stossel video on the matter: http://www.youtube.com/watch?v=3WnS96NVlMI
The presentation linked in above is a brilliant illustration of have well these choice plans work,I definitely recommend taking a look http://img.en25.com/Web/CIGNACorporation/%7Ba15190db-9a72-46c8-9ea9-a26eeadb1d5b%7D_Choice_Fund_Experience_Study_Presentation.pdf
Cigna has definitely done their research and proved (again) that consumer driven plans matter to employers and individuals. They give more freedom and lead to cost reductions. Let’s hope this is where plans begin to shift to.
This is a good post by John G, as usual, but to some extent it verges toward the “Duh” factor, in this sense……..
People who work for generous employers always fare better in health care than those who work for stingy employers. This has been true for over 60 years.
By generous i mean subsidizing the HSA’s.
When I sold health insurance, I was very depressed by what happened to persons who had zero employer help, and only bought a high deductible plan because it had the cheapest monthly premium.