Researchers from the USC Schaeffer Center for Health Policy and Economics and the RAND Corp. found that consumer-directed health plans have little or no effect on curbing spending on 26 services that medical professional and industry groups have deemed “low value.”
The researchers compared patient spending on unnecessary medical services, such as an MRI for lower back pain or imaging for an uncomplicated headache, before and after they switched from a traditional insurance plan to a consumer-directed health plan—a form of a high-deductible insurance.
The study published in The American Journal of Managed Care is the latest of several to indicate that high-deductible plans are falling short of their promises of significant savings. Recent studies by Sood and colleagues at USC Schaeffer Center, the USC Price School of Public Policy and the USC School of Pharmacy have found that most consumers on high-deductible plans are not comparing prices to find the best deals on services or on prescription drugs, even though the research indicates that some patients could potentially save hundreds or thousands of dollars per year.
Unnecessary services add up to an estimated $750 billion in wasteful healthcare spending each year, according to the National Academy of Sciences. Examples of the unnecessary services in the list of 26 that the researchers tracked were T3 testing for hypothyroidism, a spinal injection for low-back pain, and stress testing for stable coronary artery disease.
Patients on consumer-directed health plans share more costs for their care than patients on traditional plans as they pay a higher deductible. With the high-deductible plan, a patient can open a pre-taxed healthcare savings account and use it to pay for out-of-pocket medical services. Corresponding author Neeraj Sood, a professor at the USC Price School of Public Policy, said this type of plan is often pitched as way to give consumers more skin in the game, presuming that they will shop and compare prices for services or skip unnecessary care and therefore spend less.
Sood noted that enrollment in these plans has risen dramatically in the last decade, with a nearly seven-fold increase. Only about 4% of Americans with employer-sponsored insurance were on a consumer-directed health plan in 2005, compared to about 30% today. The vast majority of individuals who obtained insurance under the Affordable Care Act are on consumer-directed health plans.
The latest study was based on a random 25% sample of Optum Clinformatics Datamart Insurance claims filed from 2011 to 2013 for UnitedHealthcare-affiliated commercial plan members in all 50 states.
The researchers compared unnecessary medical service claims for 365,016 patients who were on traditional plans with the claims filed for 11,075 patients who switched from a traditional plan to a consumer-directed health plan. The study accounted for patient characteristics including age, race, sex, income, and health conditions.