Patients with health coverage that includes a high deductible and either a health savings account or a health reimbursement arrangement reduced their costs even after they initiated care.
Overall, the study found about two thirds of the reduction in total health care costs was from patients initiating care less often and the remaining third was from a reduction in costs after care is initiated. The findings were published online by the journal Forum for Health Economics and Policy.
"Unlike earlier time periods, it seems that today's consumers can have greater influence on the level and mix of medical services provided once they begin to receive medical care," said Amelia Haviland, the study's lead author and a senior statistician at the RAND Corporation, a nonprofit research organization. "We found that at least part of the savings in cost per episode reflects choices for less-costly treatments and products, not just a reduction in the number of services."
Researchers from RAND, Towers Watson and the University of Southern California examined the claims experience of many large employers in the United States to determine how consumer-directed health plans and other high-deductible plans can reduce health care costs. The study was funded by the California HealthCare Foundation and the Robert Wood Johnson Foundation.
According to Haviland, at least three factors influenced the cost of care once the patient had initiated care: lower use of name-brand medications, less in-patient care and lower use of specialists. Researchers speculate that patients may talk to their doctors about their higher deductibles and ask them to help keep costs low.
"It is not surprising that deductibles of $1,000 or more reduced health care consumption, but we found that savings occurred even when employers helped employees offset these out-of-pocket costs by making contributions to their accounts," said Roland McDevitt, a study co-author and director of health research at Towers Watson, a human resource and employee benefits consultancy. "This was true for both health savings accounts and health reimbursement arrangements."
Health reimbursement arrangements and health savings accounts create different incentives for employees. Health reimbursement arrangements allow employers to pay for qualified medical expenses, including those that fall under the deductible. These payments or reimbursements are excluded from the taxable income of the employee. Unused portions may roll over at the end of the year, but any account balance is owned by the employer and employees generally forfeit the account balance if they leave the employer before retirement.
Health savings accounts create a stronger incentive for employees to manage their health care costs, because the employee owns the account. This type of account was shown to have the largest impact on cost reductions. It can earn interest and it follows employees when they change jobs.
Health savings account contributions are only allowed for those enrolled in high-deductible health plans as defined by law, but account balances may be used for qualified medical expenses at any time. The minimum health savings account deductibles for 2011 are $1,200 for single coverage and $2,400 for family coverage.
The study found that both the level of the deductible and the level of the employer account contributions influence the extent of savings. Higher deductibles of $1,000 or more together with employer account contributions of less than half the deductible produced the greatest cost reductions.
"It is clear that high-deductible health plans with personal medical accounts produce overall health care cost savings and not simply a cost shift," said co-author Neeraj Sood, associate professor at the Schaeffer Center for Health Economics and Policy at USC and a RAND economist. "This is mostly due to patients initiating less care, but a full third of the reduction is due to shifts in the mix of care they are receiving."
The authors cautioned that there was some reduction in the rate of cancer screenings and childhood immunizations during the first year of enrollment in a high-deductible plan. They found this first-year effect was relatively small, but expressed concern about the early trend. They say more research is needed to determine the extent to which these cost reductions come at a price of forgoing necessary medical care.
RAND Health, a division of the RAND Corporation, is the nation's largest independent health policy research program, with a broad research portfolio that focuses on health care costs, quality and public health preparedness, among other topics.
Warren Robak | EurekAlert!
The personality factor: How to foster the sharing of research data
06.09.2017 | ZBW – Leibniz-Informationszentrum Wirtschaft
Europe’s Demographic Future. Where the Regions Are Heading after a Decade of Crises
10.08.2017 | Berlin-Institut für Bevölkerung und Entwicklung
Using ultrafast flashes of laser and x-ray radiation, scientists at the Max Planck Institute of Quantum Optics (Garching, Germany) took snapshots of the briefest electron motion inside a solid material to date. The electron motion lasted only 750 billionths of the billionth of a second before it fainted, setting a new record of human capability to capture ultrafast processes inside solids!
When x-rays shine onto solid materials or large molecules, an electron is pushed away from its original place near the nucleus of the atom, leaving a hole...
For the first time, physicists have successfully imaged spiral magnetic ordering in a multiferroic material. These materials are considered highly promising candidates for future data storage media. The researchers were able to prove their findings using unique quantum sensors that were developed at Basel University and that can analyze electromagnetic fields on the nanometer scale. The results – obtained by scientists from the University of Basel’s Department of Physics, the Swiss Nanoscience Institute, the University of Montpellier and several laboratories from University Paris-Saclay – were recently published in the journal Nature.
Multiferroics are materials that simultaneously react to electric and magnetic fields. These two properties are rarely found together, and their combined...
MBM ScienceBridge GmbH successfully negotiated a license agreement between University Medical Center Göttingen (UMG) and the biotech company Tissue Systems Holding GmbH about commercial use of a multi-well tissue plate for automated and reliable tissue engineering & drug testing.
MBM ScienceBridge GmbH successfully negotiated a license agreement between University Medical Center Göttingen (UMG) and the biotech company Tissue Systems...
Pathogenic bacteria are becoming resistant to common antibiotics to an ever increasing degree. One of the most difficult germs is Pseudomonas aeruginosa, a...
Scientists from the MPI for Chemical Energy Conversion report in the first issue of the new journal JOULE.
Cell Press has just released the first issue of Joule, a new journal dedicated to sustainable energy research. In this issue James Birrell, Olaf Rüdiger,...
19.09.2017 | Event News
12.09.2017 | Event News
06.09.2017 | Event News
19.09.2017 | Event News
19.09.2017 | Physics and Astronomy
19.09.2017 | Power and Electrical Engineering