Employers offer 'consumer' plans with trepidation
MANAGED CARE September 2004. ©MediMedia USA
When it comes to consumer-driven health care plans, many employers aren't too enthusiastic about them, according to a report issued by the Centers for Studying Health Systems Change, a nonpartisan research group based in Washington, D.C.
"There's a lot of buzz from vendors and consultants about consumer-driven health plans, but many employers are skeptical about cost savings for their company," says Paul B. Ginsburg, PhD, president of the center.
The center's findings are published in a recent report, "Rhetoric vs. Reality: Employer Views on Consumer-Driven Health Care," and are complemented by those of another organization, the Commonwealth Fund. Researchers from the Commonwealth Fund further suggest in the report "Will Consumer-Directed Health Care Improve Health System Performance?" that these plans could worsen health outcomes by reducing patients' receipt of needed preventive care and care for chronic conditions.
The plans, which use high-deductible health coverage tied to employer-funded spending accounts, have a fundamental flaw in their current design — they do not contain strategies that promote high-quality care, according to Karen Davis, president of the Commonwealth Fund. There is concern that these plans will primarily attract healthier and higher-income individuals, leaving sicker and lower-wage employees in higher-cost alternatives.
In the Centers for Studying Health Systems Change report, one employer surveyed noted that 70 percent of its covered employees had health care costs of less than $1,000 a year. This employer expected that giving workers a $1,000 spending account would encourage workers to use more services and raise costs, not lower them. Another employer said 30 percent of its workforce did not take up the company's health insurance, reportedly because employees were covered under spousal insurance. But funding a spending account might prompt more workers to opt for coverage and increase the company's costs, the employer believed.
Estimates suggest that consumer-directed health plans are in their infancy and constitute a relatively small part of the employer health insurance market. Only about 270,000 individuals are enrolled in a health reimbursement account (HRA) out of more than 160 million people covered by employer plans. In companies that offer an HRA, enrollment ranges from 4 percent to 25 percent of employees.
SOURCE: K. N. LOHR ET AL., "USE OF MEDICAL CARE IN THE RAND HEALTH INSURANCE EXPERIMENT: DIAGNOSIS- AND SERVICE-SPECIFIC ANALYSES IN A RANDOMIZED CONTROLLED TRIAL," MEDICAL CARE 24 (SEPTEMBER 1986 SUPPL.): S1–S87.