How Valid are the Assumptions Underlying Consumer-Driven Health Plans?
Grant Description: How valid are the assumptions underlying consumer-driven health plans? The researchers used both qualitative and quantitative methods to examine the key assumption underlying consumer-driven health plans (CDHP). If consumers are given financial incentives, choices and information to support these choices, they will take charge of their health and health care and make prudent choices. Working with Definity Health Plan and Whirlpool (which offers their employees a choice of Definity and a PPO option), the researchers followed one cohort of employees who enrolled in Definity and another cohort who enrolled in a PPO plan. The objective of the study was to compare the knowledge, use of information, satisfaction with care, cost-effective utilization, and costs of care for persons enrolled in Definity and the PPO over time.
Policy Summary: The success of the consumer-directed approach rests on a few basic assumptions: if consumers are given financial incentives, choices, and information to support those choices, they will take charge of their health and health care and make prudent choices. In this study the researchers examined the validity of these key assumptions that underlie the consumer driven plan designs. To achieve this goal, they followed CDHP enrollees over time and compared their knowledge, their use of health information, their cost-effective utilization decisions and their activation levels with enrollees in conventional plans over the same time period. The study relied on survey data as well as claims data. The findings indicate that enrollment in a CDHP resulted in a reduction of office visits in the first year of enrollment. These reductions in care appear to be indiscriminant, with patients cutting back in both high and low priority visits (evidence-based visits and non-evidence-based visits). The reductions in high and low priority visits were greater among lower socioeconomic status (SES) employees. These findings were mirrored in analysis that focused on pharmacy claims. Using pharmacy claims data the researchers found that CDHP enrollment did not increase generic substitution relative to preferred provider organization (PPO) enrollees. Nor did it influence drug adherence rates. High deductible CDHP enrollees, however, were approximately twice as likely as those with other pharmacy coverage to discontinue four out of six drug classes studied, including antidiabetics, antihypertensives and lipid lowering drugs. Finally, the researchers examined the assumption that enrollment in a CDHP will stimulate consumers to become activated, informed users of care. They found that those who are more activated are more likely to enroll in a CDHP in the first place and to engage in the behaviors that CDHPs seek to encourage and to newly adopt these behaviors over time. This adoption of behaviors appears to be true regardless of plan type. That is the more activated are more likely to seek out information to inform choices and engage in healthy behaviors than those with lower activation levels both in PPOs and CDHPs The findings suggest that consumers do respond to the financial incentives built into CDHP’s. However, consumers are unable to make cost-effective choices, and instead cut back on care in an indiscriminant fashion. Further, these more general incentives do not increase activation among those who enroll, but attract those who are already more activated. Overall, the findings suggest that a more efficient approach may be to move away from generalized financial incentives toward more targeted approaches that only discourage non-evidence-based care. Even though CDHPs do not appear to foster activation, they may provide a supportive environment for those who are more activated to better manage their health.