A new RAND Corporation study published in the March edition of the American Journal of Managed Care finds that people with high deductible health insurance plans have lower overall healthcare spending than people with traditional policies. This trend holds true even for preventive care like screening tests and vaccinations. The study involved 800,000 families, and their expenses were tracked in 2004 – 2005. The researchers found that deductibles of at least $1000 per person led to a 14% average decrease in spending when compared with families who had lower deductibles.
There is a general awareness that our ever-increasing healthcare spending is not sustainable, and curbing that spending has been a clear goal for some time now. Obviously, high deductible health insurance policies are one way to go about that, but the researchers in this study express concern about the fact that preventive care spending drops when people are enrolled in high deductible health plans. They note that
“The drop in preventive care happened even though the high-deductible plans in the study waived the need to pay a deductible when receiving such care. This suggests that enrollees in high-deductible plans either did not understand this part of their policy or some other factor discouraged them from getting preventive care.”
I think that this is an area that deserves a lot more study, and definitely more than a passing sentence dismissing the drop in preventive care spending as a factor of the insureds not understanding their coverage or some “other factor” that “discouraged them from getting preventive care.” Maybe researchers could begin tracking the long term health outcomes for those families, rather than assuming that their reduced spending on preventive care will likely translate into higher medical costs in the future.
Preventive care is a bit of a misnomer, as much of it involves screening and detection rather than truly preventing illness. And it is not without controversy. Experts have changed guidelines in recent years to recommend less-frequent screening in some cases, and some question whether or not we’re doing too much screening in general. Vaccines are also a bit of a controversial topic, and have become more so in recent years as the number of vaccines recommended for children has increased dramatically.
One of the cornerstones of the PPACA is the requirement that health insurance policies cover preventive care with no cost sharing, as of the beginning of this year. The RAND study looked at healthcare spending for families in 2004-05, but noted that even then, the plans in their study did not require insureds to meet the deductible for preventive care. It’s true that there may have been some families that didn’t understand that their coverage included preventive care without a deductible, but there are several other factors that could have been involved. Families that opt for a high deductible policy are likely in better health to begin with (since it would make sense that people with poorer health would opt for a policy that would curb their out-of-pocket expenses), and may be taking various measures to prevent illness rather than just detect it early. Perhaps some of the families who chose high deductible health insurance policies were aware of the controversy surrounding various screening tests and vaccinations, and elected not to receive them, despite being aware that their health insurance policy would cover the cost.
The cause-and-effect link here could also be backwards. Let’s say an employer offers only a traditional, low-to-moderate deductible policy, and all of the employees are enrolled in that plan. Then the employer starts to also offer a high deductible, HSA-qualified policy in addition to the traditional plan. In general, employees who are in poor health will probably stick with the traditional plan in order to limit their out-of-pocket exposure. But employees who are healthy and have few medical expenses might see the high-deductible policy as a good way to lower their health insurance premiums, and the HSA as a good way to save for potential future costs (especially if the employer is contributing to the HSA). Thus, we might have a self-selected group of generally healthier people who enter into the high deductible plan. This could potentially explain a reduction in healthcare spending when compared with the overall group that opts for the traditional policy.
These are just a couple of the ideas that came to mind when I read through the RAND study. I think that the drop in overall spending and preventive care spending is more complicated than simply being a result of having a higher deductible, and warrants more research. Most of us agree that we need to find a way to reduce overall healthcare spending, but we also need to make sure that we don’t compromise future healthcare outcomes in the process. While some of the issues mentioned in the study – such as the drop in routine blood tests for people with diabetes – are definitely concerning, we shouldn’t simply assume that a reduction in overall preventive care will automatically lead to poorer health in the future.
