Self Insured

Health care accounting

During the last decade, more than 4.5 million Americans have enrolled in "consumer-driven" health care plans. Such plans typically feature health savings or reimbursement accounts coupled with insurance that kicks in only in the case of an extremely expensive medical catastrophe. The idea is to control costs and increase patient choice by having individuals pay for routine care out of funds they control directly, while still providing a safety net to guard against massive expenses such as a heart transplant or cancer care. According to a recent report by the American Academy of Actuaries, consumer-driven plans not only drastically reduce costs but do so without sacrificing health outcomes.

The report, which reviewed four industry-conducted studies of cost and care decisions in consumer-driven plans, showed first-year cost reductions of between 4 percent and 15 percent after patients switched to the new system. While the report cautioned that continuing savings were difficult to measure, it tentatively concluded that all four of the studies reviewed "seem to indicate that there may be a favorable effect on ongoing cost trends." That's in marked contrast to traditional insurance plans, which tend to increase in cost each year. The report also found that, contrary to the conventional wisdom, people enrolled in consumer-driven plans use significantly more preventive care than people in traditional plans.

While these four studies are not definitive, the report's authors say no credible study contradicts their findings. Boosters of universal insurance typically take a dim view of consumer-driven health care, but the research is hard to ignore: The best way to get prevention and savings is to give individuals the power to take care of themselves.