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High Deductible Plans and Chronic Disease Spending

By May 15, 2019Commentary

There is ongoing debate about the good or bad effects of being in a high-deductible health plan in terms of effect on health outcomes.  They pretty clearly lead people to utilize and spend less.  The effects are a little complicated when the plans are coupled with a health savings account of some type.  A recent report from the Health Care Cost Institute examines the specific effect on people with chronic diseases.   (HCCI Report)  The authors used data on about 10 million people covered by an employer-sponsored health plan for a full year during 2014 to 2016.  About a quarter of the people were in a high-deductible plan.  The four major service categories were included:  inpatient hospital, outpatient hospital, physician and other clinical services and prescription medications.  The group enrolled in high deductible plans had 13% lower total spending in 2016 on average, and their spending was lower in each major category.  Inpatient was 13% lower, outpatient hospital, 7% lower, physician 8% and drugs a whopping 26% lower.The high-deductible members averaged $4562 in annual spending in 2016 and the people in other plan designs averaged $5216.  From 2015 to 2016, spending increased 9% for non-HD employees and 7% for the HD ones.

The researchers then looked at spending for three common chronic diseases:  diabetes, chronic pulmonary obstruction disease and hypertension.  Spending among HD plan enrollees was consistently lower, 3% lower for hypertension and 10% lower for diabetes.  Interestingly in the case of inpatient and outpatient hospital services, HD members appeared to use fewer services, but the ones they used were more expensive.  In the case fo drugs, there was lower use but more of the reduced spending was due to using ones with lower prices.  This analysis did not adjust for certain characteristics that in other studies could account for spending differences; such as age, general health status and income.  But looking at the chronic disease results suggest that at least some utilization and spending difference would persist.  You might be a little concerned about the reduced drug spending, since drugs are a common treatment for all three tested chronic diseases, but perhaps people were more likely to use generics or cheaper brand drugs.  It also is not clear what the outcomes might be from the differential usage patterns.  Did people only forego unneeded care or did they skip services that might truly improve their health.

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