High-deductible health plan patients use less health care

Physician visits and prescription drug use dropped among workers who had high-deductible health plans with health savings accounts, according to a Health Affairs study.

The study compared health-care costs for two Midwestern companies between 2006 and 2010. One of the companies converted its workforce to a HDHP with a health savings option in January 2007. The other company did not.

Routine cancer screening among those on the HDHP initially fell, and then rebounded by the third year. However, emergency-department visits rose during the third year. Hospitalizations remained the same.

The decline in preventive care suggests that health insurers must “design plans to incentivize primary care and prevention and educate members about what the plan covers,” the authors said.

Access to care is hindered either by the inability to afford care or the lack of opportunity for timely care. Regardless of the reason, 1 out of 5 Americans had unmet medical needs in 2010, compared with 1 out of 6 in 2000.

 For several years, the Kaiser Family Foundation has been tracking Americans’ health–care utilization. In a 2012 survey, more than 1 out of 3 relied on self-help remedies and over-the-counter drops, and cut back dental care.

People with HDHPs generally use less health care. They usually use self-diagnosis, followed by self-rationing. They generally cut back equally on unnecessary and necessary care. Patients tend to give less weight to future health than to present costs.

A 2011 RAND study showed that most HDHP enrollees cut back on care regardless of their income or health.

People on Medicare are especially sensitive to greater cost-sharing, even to increases of just a few dollars. One study of health plans that raised copayments by less than $10 for physician visits showed a dramatic impact – which ultimately led to more costly care later on. For every 100 people who had to pay more, there were 20 fewer doctor visits, two additional hospitalizations and 13 more days in the hospital the following year. Unlike the younger participants in the 1970s RAND study, Medicare beneficiaries have far more chronic conditions that can flare up without consistent care.

The long-term effects of cutting back are unknown. However, forgone care can lead to greater complications. For example, high cost-sharing causes those with newly diagnosed chronic conditions to delay filling their prescriptions.

Some companies are employing a strategy called value-based insurance design. The format varies the degree of cost-sharing with employees based on the scientific evidence of a drug’s or procedure’s effectiveness. For example, Pitney Bowes reduced the copayments for several medications that treat conditions such as diabetes, high blood pressure and asthma. The company’s higher pharmacy costs were offset by fewer emergency department visits and avoidable hospitalizations.

A 2007 study concluded that the optimal copayment for cholesterol-lowering medication was $0 or even negative – meaning patients should be paid to take the drugs, in order to lower overall costs.

Health-insurance companies have enjoyed record profits, because patients are seeking less care than anticipated as premiums and deductibles have continued to rise. It is hard to know whether this is a temporary lull or the new normal in health-care use.

What is puzzling is that HDHPs also prompt patients to cut back on preventive care, even when it is free. This suggests either they did not understand that their policies paid for the services completely, or they are leery of the health-care system generally.  They also may fear that the doctor will find something wrong that will result in costly treatment.

HDHPs work well for a significant percentage of the population. However, they will do little to hold down national health costs, because a small percentage of consumers account for a large percentage of those costs. The healthiest 50 percent of Americans each spend about $250 a year on health care. Treating the sickest 5 percent costs more than $43,000 a year apiece.  Even an HDHP would not make a dent in costs for these patients. Once the deductible has been met, the incentive to minimize health-care costs often subsidies.

The harsh reality of HDHPs is that 8 out of 10 families earning about $52,000 do not save enough to cover the deductible. More than 40 percent of adults with HDHPs spent 10 percent or more of their income on household medical expenses – a threshold many consider a financial burden on the average family.

Health savings accounts are meant to be an incentive to set aside money to pay for future medical expenses. However, many have difficulty saving for retirement or even vacations – both more pleasant prospects and worthy goals. If people cannot do that, it is unlikely they will save for an unpleasant circumstance such as an unforeseen bout with cancer.

A 2008 consumer survey delivered one of the most depressing commentaries on the American health-care system: People were more concerned about the prospect of paying for the treatment of an illness than about the illness itself.