For some people with employer-sponsored health insurance, a new calendar year means a new healthcare plan. In recent years, many employers have encouraged employees to consider high-deductible health plans – or, in some cases, have made an HDHP the only option. These plans’ premiums tend to be lower than those of other plans, but require enrollees to cover the full cost of most care until they’ve met the deductible. In 2014, the average HDHP deductible was $2,099 for an individual and $4,332 for a family.
Economists have suggested that people with traditional insurance coverage over-consume healthcare because each doctor visit or lab test requires a relatively low co-payment. If we paid more for each service – had “skin in the game” – the thinking goes, we’d be more judicious about the healthcare we consume and shop around for the best value. Theoretically, this could result in lower (or at least slower-growing) healthcare expenditures without worse health outcomes. (Of course, all this assumes healthcare is similar to other consumer goods, when in fact there are some important differences.)
A few months ago, I wrote about one old study and one new one that found when faced with higher costs for healthcare services, consumers do indeed use less care – but they don’t become smarter about which care to use. Now, another study reports that people with HDHPs are no more likely than people with traditional plans to look for the best price when purchasing medical care.
In a Research Letter published in JAMA Internal Medicine, Anna D. Sinako of the Harvard TH Chan School of Public Health and colleagues report on their survey of a nationally representative sample of US adults ages 18-64 who used medical care in the past year. They asked participants about their attitudes towards price shopping and whether they compared costs between different providers when they most recently received medical care. The authors report:
During their last use of medical care, HDHP enrollees were no more likely than enrollees in traditional plans to consider going to another health care professional for their care (n = 120 [10.9%] vs n = 85 [10.0%]; P = .67), or to compare out-of-pocket cost differences across health care professionals (n = 42 [3.8%] vs n = 23 [2.7%]; P = .37).
Simply increasing a deductible, which gives enrollees skin in the game, appears insufficient to facilitate price shopping. Members of HDHP and traditional plans are equally likely to price shop for medical care, and they hold similar attitudes about health care prices and quality.
Lower premiums might still make HDHPs attractive for employers and for enrollees who don’t need much healthcare. But the evidence is mounting that they’re not turning people into smarter consumers of healthcare.
How could they?
High deductible plans create a huge financial incentive to deplete them. In that situation people pay the maximum prices for drugs and other services before their insurance company rationing takes over and they may still have a copay then. I could easily see how how everyone could cover the average healthcare expenditure in cash. You can't make informed decisions on pharmaceuticals when there are no choices:
I can't say I'm surprised by this. It's not like any doctor's office I've ever been to has posted the cost of everything at the door. It's hard enough to get people to price-compare at the grocery store where everything has a sticker. How on earth are you supposed to do that for medical care? And even if you do, what's the point if you can't get in to see the doctor/nurse/whomever for 6 months?
Let's see some of these economists do some standard medical shopping and see how much work it is for them.
Not to mention that most insurance locks you into a provider network. Good luck with that shopping. If you even have enough time to go back and forth with the hospital etc, and confirm that all charges are included. Since a lot of things get billed separately.
Why does Liz single-out employer-based health plans? HDHP are the only affordable plans on the Obamacare exchanges, as well.
Hi, a reader, you're right that plans in the ACA marketplaces often have high deductibles, too. I've focused on the employer-sponsored plans because employers have an interest in their employees' health over the course of several years. If high deductibles cause employees to skimp on all care (as evidence suggests they do), it could lead to worse health and higher premiums in future years, as well as harming employees' productivity. Marketplace plans could share the motivation to hold down future costs to some extent, but it will depend on whether people tend to stick with the same plans year after year.