The popularity of high-deductible plans among employers, and some consumers, is due to the supposition that they will reduce inappropriate health care utilization and cause members to seek less expensive providers, leading to lower spending and premiums. High-deductible plans are now often accompanied by health savings accounts, into which both employers and employees may make contributions. The health savings account balances may be used to pay for a variety of health expenses, including those that are not covered by a health plan because of a deductible or other forms of cost-sharing. HSA balances are permitted to accumulate over the years, so significant funding can build up in an account. These balances can even be used by the employee after retirement. While HSAs ease the pain of high-deductible plans for consumers, they also may vitiate the intended encouragement of cost-conscious health care decision-making. A study from the Employee Benefits Research Institute explores this effect. (EBRI Study) The study was based on data from a large company with over 120,000 employees. Data from around 6500 of these members for the years 2014 to 2016 was analyzed. Service use was compared with HSA contribution and balance levels.
In general the authors found that as HSA accounts built up higher balances, the individuals with the accounts used more services. The increase of services was spread across a number of outpatient categories, including ER visits, primary care and specialist physician visits, chiropractic services, physical therapy, blood tests and other diagnostic testing. In particular, individuals with more than $3000 in an HSA balance at the start of the year had an average one-half more visits to a physician than did persons with balances under $3000. Spending was $19.52 per year higher for primary care visits and $28.06 for specialist visits. Overall spending was about $500 higher for every $1000 in HSA balances and was $550 higher for persons with at least $3000 in an HSA. Balances in HSAs more than doubled in the period 2014 to 2016. Only 2% of accounts started 2016 with a zero balance and a large number had balances over $3000. It is not possible to tell if the higher utilization of people with HSA balances is due to initial selection. It could be that people anticipating they will have more health care utilization are more likely to have an HSA. The study highlights one of the real problems in health care. Giving people positive or negative financial incentives in regard to health-care decision-making may not work as expected. Most people struggle with understanding what care they really need and what providers are best to get that care from. Various tools are available to help with that decision-making, but in general they aren’t making much of an impact. The good news is that people do seem to be contributing to HSAs and it is a positive that more consumers have some form of savings to meet health care expenses, which is a major source of financial anxiety.