A Consumer-Driven Health Plan Keeps the Doctor Away?


An apple or a consumer-driven health plan, maybe.

The usual knock against health plans that give patients a financial stake in health decisions is that patients are likely to make short-term financial decisions at the expense of long-term health: Given the chance, they might skimp on care in order to save a bit of cash, potentially resulting in worse health and perhaps even greater total expenses once their ailments become serious.

But a 2009 review of high-quality research into consumer-drive health plans (CDHPs), which typically pair high-deductible insurance with a health savings account, suggested that in fact the opposite was true: Individuals enrolled in far-less-expensive CDHPs were more likely to utilize preventive services than those in traditional plans.

Now Greg Scandlen points to yet another study suggesting that CDHP enrollment correlates with healthier behavior: According to the Employee Benefit Research Institute, CDHP enrollees "exhibited better health behavior than traditional plan enrollees with respect to smoking, exercise, and, recently, obesity rates." Neither study is conclusive, and the new study is careful to note that the study wasn't designed to determine whether CDHP enrollment actually causes better behavior. But the results make sense from a basic property rights perspective. Is it really surprising to find that individuals who have a financial stake in their own health end up making healthier decisions? 

NEXT: Health Insurance, Washington's Way

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  1. “Is it really surprising to find that individuals who have a financial stake in their own health end up making healthier decisions?”

    Actually, alot of folks will find that surprising.

    1. You beat me to it. I myself admit to being surprised. I have such a cynical, low opinion of the cognitive reasoning (drink?) abilities of most people, I wouldn’t have thought they had it in them to think beyond the next Big Mac. Color me impressed.

    2. individuals who have a financial stake in their own health end up making healthier decisions?

      Or people who make a prudent decision in one area also make them in other areas?

      1. This. People who make well-informed, proactive decisions about their health insurance are also likely to make well-informed, proactive decisions in other aspects of their lives. I’m not really sure how much of this is tied to the financial incentives….so much as just smarter people being smarter.

        1. “make well-informed, proactive decisions in other aspects of their lives”

          all the more reason to kill CDHPs now. it’s a gateway drug to school choice and privatized social security

      2. This is what I strongly suspect. People who find CDHPs appealing are likely higher-functioning individuals capable of making smart long-term decisions and delaying gratification. You have a self-selecting population here.

        1. You should read the report because it has a bunch of data, most of which doesn’t support your suspicion.

    3. “Is it really surprising to find that individuals who have a financial stake in their own health end up making healthier decisions?”

      Tonys head just popped off his neck.

      1. Mentioning a troll is trolling by proxy

        1. Wow….you guys are strict.

  2. Neither study is conclusive, and the new study is careful to note that the study wasn’t designed to determine whether CDHP enrollment actually causes better behavior.

    The question is whether CDHPs convince people to live healthier lives, or whether younger, healthier people are drawn to CDHPs to save money.

    1. ^This. I suspect there’s a fundamental misunderstanding (or misrepresentation) of causality in this analysis.

    2. If I would actually read the other comments, I would have noticed somebody already said this.

      1. It’s hard to keep track of all the threads when there are hundreds of posts like this one 😉

      2. Yeah, I did it right this time. Not sure why our haste to make what has to be the most obvious comment on this post.

        1. The unscratchable itch to be first.

  3. Talking about plans like this in a world of first dollar coverage is near impossible. The idea that you need insurance for unforeseen large medical expensive and not for routine care, such as birth control, is too alien of a concept.

    1. Not to mention that birth control is medical care at all (with rare exceptions, blah blah). Its a lifestyle drug, not a treatment for a disease.

      1. Insert “not” where appropriate, or desired.

      2. The same could be said of anything that treats “erectile dysfunction.”

        1. absolutely. I dont know why you assume RC Dean thought otherwise.

          1. Keep your government hands off my boner!!

      3. Actually, it is sometimes used for treatment. Some take it so they’re not disabled during that time of the month. I used to miss school and get anemic before taking the pill. When I tried to quit it, I gradually got worse again (including sickness and extremem pain). I know others who took it to treat acne.

    2. Insurance does cover birth control: it was $5 when I had insurance and $25 when I wasn’t.

  4. What?!? You mean to tell me that when individuals are the primary financial and personal stakeholders in their own heath care, they are capable and are even encouraged to make good health care decisions?!?!

    That’s unpossible!

  5. Correlation does not imply causation.

    My guess is that is probably the other way around. Those people that are more inclined to take care of themselves recognize the inherent ridiculousness of low deductible plans and choose otherwise.

    1. Good thing I read through the comments first or I would have posted something to the same effect.

      1. Damn you and your sarcastic wit

        1. Some opportunities are impossible to resist 😉

    2. Covered in the report:
      The Employee Benefits Research Institute (EBRI) has always been skeptical (at best) about consumer driven health care, but even EBRI is starting to see the value in this approach to financing. In May, it released the results of a survey looking at the “Characteristics of the CDHP Population, 2005 ? 2010.”

      It is curious that this EBRI report garnered so little attention. That alone suggests that the report is pretty favorable to consumer driven health.

      And so it is. EBRI finds exactly what we have been arguing for years ? that to the extent there is favorable selection into CDH plans, it is based on education more than anything else.

      This should not be surprising. Better educated people are the most likely to be early adopters of any new idea, and that is especially true in dealing with a complex system like health care. Better-educated people are more confident of their ability to understand and navigate through the complexity.

      In this case the education gap is astonishing. People in CDH plans are twice as likely to be a college graduate or have a graduate degree than people in “traditional” plans. People in traditional plans are four times more likely to have a high school education or less than are people in CDH plans. (See page 19 of the report.)

      Since better-educated people are more likely to have higher incomes and to be healthier, CDH enrollees also have somewhat higher incomes and are somewhat healthier than people in traditional plans, but the difference is small ? much smaller than the difference in education. For instance, in 2010, 59% of people in traditional plans reported that their health is “excellent or very good,” while 67% of people in CDHPs said the same. Income differences were similarly small. Incomes between $100k and $150k were reported by 14% of CDHP enrollees and 15% of traditional enrollees, incomes of $150K and over were reported by 11% of CDHP enrollees and 10% of traditional enrollees.

      This suggests that if the researchers controlled for education ? that is, looked at the enrollment choices of people with similar educational levels ? the CDHP people would actually be sicker and less wealthy than those in traditional plans.

      So much for the ol’ “healthy and wealthy” argument. Thank you, EBRI

      1. The CDHP and HDHP populations were less likely to be young (ages 21?34) than the population with traditional coverage.

        But if adjusted for age, the opposite comes out, due to young people being healthier.

        21-34 is the age where CDHP’s have the biggest impact, as that is the age you can build up big accounts due to not using it much.

  6. Paging Dr ProLib, Paging Dr ProLib…….


    If I were a Democrat (and I’m only posing as one here!), this would be why I think Hillary Clinton should challenge Barack Obama in 2012.

  7. Hillary already is President. Everyone in the administration works for her. You think Leon Panata is Obama’s guy?

  8. there’s also a failure to control for internet-fed hypochondria. rich or poor, folks with any plan will exploit it, and naturally improve their (physical) health and waste valuable resources feeding compulsions.

  9. It is obvious! Here in Mexico, we pay cash for health/dental care and it is VERY cheap and totally in our own control. Come on down.

  10. Reminds me of what I’ve been hearing from Ron Paul…. Like your deal in Mexico, frankania!

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