The American Academy of Actuaries has released a report summarizing and analyzing studies of consumer-directed health plan results. (Actuary report) The report looks at four studies released by sponsors of CDH plans, Aetna, Cigna and UnitedHealth (2 studies). All the CDH plans examined in the study coupled the typical high-deductible benefit design with an HRA or HSA account. The Academy was interested in four primary questions: did the CDH plans have first-year cost savings and ongoing favorable cost trends; were the results of the study due to the sponsor’s bias or member selection effects; were the cost savings achieved at the expense of obtaining or delaying needed care; and were the CDH plans just a way for employers to shift cost to employees and their families.
While noting some limitations in the studies, the Academy found that the favorable results reported appeared to be credible. First year cost savings compared to traditional plan trends were from 12-21%. Ongoing trend savings were more difficult to ascertain but appeared to be 3-5% a year, which is a very significant savings over a number of years. The report found that the studies had been done in a way that did not suggest sponsor fiddling with results and that the studies had properly controlled for member selection effects. Most importantly, the studies indicated that CDH enrollees actually had higher use of preventive care, increased adherence to medication and more use of generics and at least as good a care for chronic diseases. This would seem to indicate that these enrollees understood the financial incentive to spend wisely and to try to keep themselves in good health. Also surprisingly, the Academy said that when all aspects of the CDH plans were considered, the enrollees actually ended with a lower portion of the total cost share than did people enrolled in traditional plan designs. The presence of an HRA or HSA seems critical to the last two results because those accounts allow the avoidance of the deductible for preventive and other services and because they are typically funded by the employer, the amount of cost shifted is limited.
This study is an encouraging endorsement of a form of market innovation which many have viewed skeptically. If the results hold up with more CDH experience, those looking at improving the health system should consider mandated use of this benefit design.