Health Benefit Services

: : Julie Seiden, Managing Director,
Health Benefits Services | 

631.923.1595 ext. 310

G.R. Reid Consulting Services, LLC 

CDHPs Reduce Spending...Along with Use of Preventive Care Services

Consumer-directed health plans (CDHPs) lower health care spending in their first year, but employers implementing these plans will be well-advised to beef up communications on preventive care coverage. This is because, according to one recent study, consumers in these plans are curtailing their use of preventive care along with other health care services, even though the plans studied covered preventive care on a first-dollar basis.

The study, from researchers at Rand and published in the American Journal of Managed Care, examined claims data for more than 800,000 households enrolled in the health plans of 53 large U.S. corporations, 28 of which offered CDHPs. The study notes that, at the beginning of 2010, more than 54% of U.S. employers offered at least one CDHP option and, as of 2009, 20% of Americans with employer coverage were enrolled in such plans.

The study found that families enrolling in CDHPs for the first time spent less on health care than families enrolled in traditional plans. Specifically, the monthly health care costs of households enrolled in higher-deductible plans grew by $85 less; in percentage terms, the expenditures of households in traditional plans grew by 20%, while the expenditures of households in the consumer-directed plan group grew by 4%. Consequently, in the first year after enrolling in a consumer-directed plan, spending was 14% lower than for comparable families in other plans, according to the study. Cost reductions were greatest for households with deductibles of $1,000 or more. Employer contributions to spending accounts that were part of the CDHP plan design did not undermine these households' cost sensitivity and awareness, as these plans reduced spending as much as plans with a similar deductible but no employer account contributions.

Cost reductions were due to lower growth in inpatient, outpatient and prescription drug costs. CDHP households also made less use of certain preventive care services than did households in traditional plans. Specifically, over the study period, childhood immunization rates increased for households in traditional plans, but decreased among CDHP households. Also, for certain cancer screenings (mammography, cervical cancer screening and colorectal cancer screening), use was moderately lower in CDHP households.

Studies almost universally agree that preventive care services are a good value for the money, since they catch medical problems early on, thereby potentially reducing disease severity and complications and helping those receiving such services to live longer, healthier and more productive lives. Therefore, any indications that consumer-directed health plans make it less likely that enrollees use covered preventive care services should be a concern. Did the high deductible deter households in the study from seeking out preventive care? Did plan members overlook the fact that preventive care was covered on a first-dollar basis, and instead apply a cost-conscious mentality to spending for services not perceived as important or a good value? 

Whatever the reasons, employers need to take steps to ensure plan communications clearly send these messages:

• Preventive care services are covered without cost-sharing from plan members.

• Preventive care services can enhance individual short- and long-term health.

• Most preventive care services are simple, efficient and relatively pain-free.

Work with your company's health plan provider to deliver these messages in ways targeted to your workforce, perhaps including individualized reminders as to the frequency of recommended screenings and immunizations. A healthy workforce, along with optimal plan design, is your company's best chance for effectively managing health care spending.