Low-Premium Insurance Patients Don't Just Focus On Cheapest Cost

Health plans that offer low premiums and high deductibles believe that patients with deductibles of $1,000 or more for individual coverage (or twice that for family coverage) will shop around for the best price to get their health care.

Health plans that offer low premiums and high deductibles believe that patients with deductibles of $1,000 or more for individual coverage (or twice that for family coverage) will shop around for the best price to get their health care.

Not so, according to a new analysis by the USC Schaeffer Center for Health Policy and Economics and the RAND Corporation which examined consumer decisions with and without these so-called consumer-driven health plans (CDHPs) when receiving nine common outpatient services, like office visits, chest x-rays and colonoscopies.

 CDHPs have gained traction in the health insurance market as premium costs have boomed in order to cover even more services and riskier patients as well. In 2006, CDHPs made up only 4 percent of the total employer-provided heath insurance plans in the U.S but by 2010—the latest date that statistics were available—that figure had jumped to 17 percent.  Is it saving them money?

The new analysis in Forum for Health Economics&Policy
found that patients with low premium health plans paid roughly the same amount as their traditionally insured counterparts for 8 out of 9 services analyzed. The only exception was office visits where the researchers found that patients with low premium health plans paid about 2 percent less for office visits. That's for people who used those services. Obviously people who are healthy and want insurance to be insurance and don't expect it to cover their birth control and sex change operations are paying far less than high premium, low-deductible customers.

"We looked at data from 63 large employers and find little or no evidence that enrolling in a consumer directed health plan encourages price-shopping for health care," said lead author Neeraj Sood, associate professor at the USC Schaeffer Center.  

The problem is twofold, Sood said. A lack of transparency about the costs of medical treatment makes it difficult for shop around for the best price – when's the last time you called around to radiology departments to inquire about the cost of an x-ray? Also, patients are most likely just to receive outpatient services from the providers their primary care physicians recommend.

"People don't question their doctor's advice," Sood said, who speculated that one possible solution would be to find a way to incentivize those doctors to help their patients find the most affordable options possible.

Overall, CDHPs do seem to offer a cost savings to patients, he said, but only because the high deductibles discourages patients from seeking care. That, in turn, can create health problems down the road.

"CDHPs are gaining market share and the trend will likely continue. We need more aggressive price and quality transparency initiatives coupled with high deductibles to increase consumerism in health care" Sood said.

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