consumer driven care: potential and concernsoop expenses premium expenses note: among adults ages...

THE COMMONWEALTH

FUND

Consumer Driven Care: Consumer Driven Care: Potential and ConcernsPotential and Concerns

Karen DavisPresident, The Commonwealth FundConsumer Driven Healthcare Summit

September 14, [email protected]

www.cmwf.org

2

THE COMMONWEALTH

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Data SourcesData Sources• EBRI/Commonwealth Fund Consumerism in Health Care

Survey– 1,204 Adults 21-64, September 28 - October 19, 2005;

Harris Online– Comprehensive – plan with no deductible or <$1000

(individual), <$2000 (family) - n=1,061 (all from national sample)

– HDHP – plan with deductible $1000+ (individual), $2000+ (family), no account - n=463 (126 – national, 337 –oversample)

– CDHP – plan with deductible $1000+ (individual), $2000+ (family), with account - n=185 (17 – national, 168 –oversample)

• P. Fronstin, S.R. Collins, Early Experience with High-Deductible and Consumer-Driven Health Plans: Findings From the EBRI/Commonwealth Fund Consumerism in Health Care Survey, EBRI Issue Brief, December 2005.– Will be repeated this fall – Released in December 2006

3

THE COMMONWEALTH

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Data Sources (Data Sources (concon’’tt))• Commonwealth Fund 2005 Biennial Health Insurance Survey

– 1,878 adults ages 19–64 insured all year with private insurance, August 18, 2005–January 5, 2006; telephone; Princeton Survey Research Associates

– Deductibles under $500, $500-999, $1000 and over– New results on employer-sponsored and individual

insurance and by size of deductible released today• S.R. Collins, et al., TK, The Commonwealth Fund,

September 2006• Kaiser Survey of Employer Health Plans, 2005

– G. Claxton et al., “What High Deductible Health Plans Look Like: Findings from a National Survey of Employers, 2005,” Health Affairs Web Exclusive, September, 14, 2005;

– J. Gabel et al., “Health Benefits in 2005: Premium Increases Slow Down, Coverage Continues to Erode,”Health Affairs, September/October 2004

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THE COMMONWEALTH

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Employers Contributions Lower for Workers in HSAEmployers Contributions Lower for Workers in HSA--Qualified HDHP; Employees Premiums and Qualified HDHP; Employees Premiums and

Deductibles HigherDeductibles Higher

431 610

2270

3413

1348323

553

0

1000

2000

3000

4000Deductible contributionPremium contribution

^ “All plans” refers to all conventional HMOs, PPOs, and POS plans in the survey, not just HDHP/HRA or HSA-qualified HDHPs. Source: Calculated based on: G. Claxton et al., “What High Deductible Health Plans Look Like: Findings from a National Survey of Employers, 2005,” Health Affairs Web Exclusive, September, 14, 2005; J. Gabel et al., “Health Benefits in 2005: Premium Increases Slow Down, Coverage Continues to Erode,” Health Affairs, September/October 2004.

All plans^

Allplans^

$1,779

$933

$2,823

Dollars

$3,413

Worker contribution Employer contribution

HSA-qualified

HDHP

HSA-qualified

HDHP

5

THE COMMONWEALTH

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Few Insured People Are Currently Covered by High Few Insured People Are Currently Covered by High Deductible Health PlansDeductible Health Plans

Source: The Commonwealth Fund Biennial Health Insurance Survey (2005).

ESI, Deductible

<$1000,73%

Individual, Deductible

<$1000,4%

Don’t know/ refused,

13%

Percent of 108.2 million adults 19-64 insured all year with employer-sponsored or individual insurance

ESI, Deductible $1000 or more

(7%)

Deductible $1000 or more,

10%Individual,

Deductible $1000 or more (3%)

6

THE COMMONWEALTH

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Distribution of Individuals Covered by Private Distribution of Individuals Covered by Private Health Insurance, by Type of Health PlanHealth Insurance, by Type of Health Plan

HDHP9%

CDHP1%

Comprehensive89%

Note: Comprehensive = plan w/ no deductible or <$1000 (ind), <$2000 (fam); HDHP = plan w/ deductible $1000+ (ind), $2000+ (fam), no account; CDHP = plan w/ deductible $1000+ (ind), $2000+ (fam), w/ account.Source: P. Fronstin, S.R. Collins, Early Experience with High-Deductible and Consumer-Driven Health Plans: Findings From the EBRI/Commonwealth Fund Consumerism in Health Care Survey, EBRI Issue Brief, December 2005.

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THE COMMONWEALTH

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Less than Half of Those Enrolled in EmployerLess than Half of Those Enrolled in Employer--Based High Deductible Health Plans Had a ChoiceBased High Deductible Health Plans Had a Choice

58

47 45

0

25

50

75

Traditional(n=1016)

CDHP HDHP

Percent of adults with employer-based coverage who were offered a choice of health plans

• CDHP and HDHP owners are less likely to have a choice of plans from their employer

• When they have a choice, the savings account is the leading reason for choosing CDHP, while premium cost is the most frequent reason for choosing HDHP. Traditional plans are chosen for low out-of-pocket costs.(n=134) (n=334)

Source: P. Fronstin, S.R. Collins, Early Experience with High-Deductible and Consumer-Driven Health Plans: Findings From the EBRI/Commonwealth Fund Consumerism in Health Care Survey, EBRI Issue Brief, December 2005.

8

THE COMMONWEALTH

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Adults Covered by Employer Health Insurance Adults Covered by Employer Health Insurance with a Choice of Plan Were Less Likely with a Choice of Plan Were Less Likely to Pick a Plan with a Higher Deductibleto Pick a Plan with a Higher Deductible

Higher25%

Lower44%

Deductible was the same

4%


Don’t know/ refused

20%

Percent of adults ages 19–64 with ESI and insured all year

No plans have a deductible

7%

9

THE COMMONWEALTH

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Enrollees of HDHP/Enrollees of HDHP/CDHPsCDHPs Are Less Are Less Satisfied with Their CoverageSatisfied with Their Coverage

8

28

63

2939

33 3226

42

0

25

50

75

Extremely or verysatisfied

Somewhatsatisfied

Not satisfied

Comprehensive HDHP CDHPPercent

**

*

**

*Difference between HDHP/CDHP and Comprehensive is statistically significant at p ≤ 0.05 or better.Source: P. Fronstin, S.R. Collins, Early Experience with High-Deductible and Consumer-Driven Health Plans: Findings From the EBRI/Commonwealth Fund Consumerism in Health Care Survey, EBRI Issue Brief, December 2005.

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THE COMMONWEALTH

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Enrollees of HDHP/Enrollees of HDHP/CDHPsCDHPs Are Less Satisfied Are Less Satisfied with Outwith Out--ofof--Pocket CostsPocket Costs

21

3642

31

12

57

1828

54

0

25

50

75


Somewhatsatisfied

Not satisfied

Comprehensive HDHP CDHP


Percent

* *

**

*

11

THE COMMONWEALTH

FUND

Enrollees of HDHP/Enrollees of HDHP/CDHPsCDHPs Are Less Are Less Satisfied with Choice of DoctorsSatisfied with Choice of Doctors


6

21

73

11

29

6069

10

21

0

20

40

60

80


Somewhat satisfied Not Satisfied

Comprehensive HDHP CDHPPercent

*

*

*

12

THE COMMONWEALTH

FUND

Enrollees of HDHP/Enrollees of HDHP/CDHPsCDHPs Are More Are More Likely to Delay or Avoid Getting Health Likely to Delay or Avoid Getting Health

Care Due to CostCare Due to Cost

262117

42

313135

4840

0

25

50

75

Total Health Problem <$50,000 AnnualIncome

Comprehensive HDHP CDHP

Percent of adults 21-64

(n = 61)

(n = 90)


*

**

* *

*

13

THE COMMONWEALTH

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Overall Satisfaction with Health Care Received in Overall Satisfaction with Health Care Received in Last 12 Months, by DeductibleLast 12 Months, by Deductible

4954

42

29

0

25

50

75

Total <$500 $500–$999 $1,000+

Percent of adults ages 19–64 insured all year with private insurance who are very satisfied


Annual Deductible

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THE COMMONWEALTH

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Adults with Higher Deductibles Are More Adults with Higher Deductibles Are More Likely to Rate Their Current Health Insurance Likely to Rate Their Current Health Insurance

Coverage Coverage ““FairFair”” or or ““PoorPoor””

1915

23

41

0

25

50

75

Total <$500 $500–$999 $1,000+

Percent of adults ages 19–64 insured all year


Annual Deductible

15

Adults with High Deductibles Pay Higher OutAdults with High Deductibles Pay Higher Out--ofof--Pocket Pocket Expenses and PremiumsExpenses and Premiums

900 835

2250 2250 2250

3750

1300

2020

$0

$1,100

$2,200

$3,300

$4,400

$5,500

Total <$500 $500–$999 $1,000+

OOP expenses Premium expenses

Note: Among adults ages 19-64.Source: The Commonwealth Fund Biennial Health Insurance Survey (2005).

Annual Deductible

Median annual household out-of-pocket and premium expenses among respondents insured all year with employer-sponsored insurance

16

THE COMMONWEALTH

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TwoTwo--Thirds of Adults with High Deductible Plans Spent 5% or Thirds of Adults with High Deductible Plans Spent 5% or More of Their Income on OutMore of Their Income on Out--ofof--Pocket Expenses and PremiumsPocket Expenses and Premiums

40 36

5567

25 22

3643

0

25

50

75

100

Total <$500 $500–$999 $1,000+

Household spent 5% or more of income on out-of-pocket costs and premiumsHousehold spent 10% or more of income on out-of-pocket costs and premiums

Percent of adults 19-64 insured all year with private insurance

Note: Among adults ages 19-64.Source: The Commonwealth Fund Biennial Health Insurance Survey (2005).

Annual Deductible

17

THE COMMONWEALTH

FUND

Health Plans with Higher Deductibles Are More Likely Health Plans with Higher Deductibles Are More Likely to Place Limits on Total Dollar Amount They Will Pay to Place Limits on Total Dollar Amount They Will Pay

for Medical Care Each Yearfor Medical Care Each Year

3430

4048

0

25

50

75

Total <$500 $500–$999 $1,000+

Percent of adults ages 19–64 insured all year with private insurance


Annual Deductible

18

THE COMMONWEALTH

FUND

Problems with Health Insurance Plan, by Problems with Health Insurance Plan, by DeductibleDeductible

1923

6

37 35

11

40 40

15

0

25

50

75

Had expensive medicalbills for services notcovered by insurance

Doctor charged more thaninsurance would pay andyou had to pay difference

Reached limit of whatinsurance company would

pay and left with expensivebills

<$500 $500–$999 $1,000+



19

THE COMMONWEALTH

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Bill Problems, by DeductibleBill Problems, by Deductible

148 6

172323

913

2735

20

5

17

31

41

0

25

50

75

Not able to paymedical bills

Contacted bycollectionagency*

Had to changeway of life topay medical

bills

Medical bills/debt being paid

off over time

Any medical billproblem oroutstanding

debt

<$500 $500–$999 $1,000+


*Includes only those individuals who had a bill sent to a collection agency when they were unable to pay it.Source: The Commonwealth Fund Biennial Health Insurance Survey (2005).

20

THE COMMONWEALTH

FUND

Access Problems, by DeductibleAccess Problems, by Deductible

168 11 12

2522

1217 19

3127

1926 24

44

0

25

50

75

Did not fill aprescription

Did not seespecialist when

needed

Skippedrecommended

test, treatment,or follow-up

Had medicalproblem, did not

see doctor orclinic

Any of the fouraccess

problems

<$500 $500–$999 $1,000+



21

THE COMMONWEALTH

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• Costs aren’t high because patients don’t pay enough – they are high because of the way we organize care and pay physicians, hospitals, and other providers

• Americans already pay a lot out-of-pocket for care • High deductibles have an adverse effect on access

to care for vulnerable populations• High deductibles add to financial burdens on

vulnerable populations and consume savings needed for retirement

• The information on which to make cost-conscious choices is a long way from being available

HDHP/HSAs HDHP/HSAs –– Wrong RxWrong Rxfor American Health Carefor American Health Care

22

THE COMMONWEALTH

FUND

0

1000

2000

3000

4000

5000

6000

0 100 200 300 400 500 600 700 800 900

a

Note: Adjusted for differences in the cost of living, 2003.Source: Bianca K. Frogner and Gerard F. Anderson, “Multinational Comparisons of Health Systems Data, 2005,” The Commonwealth Fund, April 2006.

a 2002OutOut--ofof--Pocket Health Care Spending per Capita, US$Pocket Health Care Spending per Capita, US$

National Health Expenditures per Capita, US$National Health Expenditures per Capita, US$

United States

AustraliaOECD Median

Canada

JapanaNew Zealand

GermanyFranceNetherlands

Americans Spend More OutAmericans Spend More Out--ofof--Pocket on Pocket on Health Care ExpensesHealth Care Expenses

23

THE COMMONWEALTH

FUND

Consumers Spending More Consumers Spending More OutOut--ofof--Pocket for Health CarePocket for Health Care

0100200300400500600700800900

19701971197219731974197519761977197819791980198119821983198419851986198719881989199019911992199319941995199619971998199920002001200220032004

Source: C. Smith et al., “National Health Spending in 2004: Recent Slowdown Led by Prescription Drug Spending,” Health Affairs 25, no. 1 (January/February 2006); Centers for Medicare and Medicaid Services, National Health Expenditures Data; http://www.cms.hhs.gov/NationalHealthExpendData/downloads/tables.pdf

Dollars spent per capita (in 2004 dollars)

$577 $583

$774

$667

$788

24

THE COMMONWEALTH

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CostCost--Sharing Reduces Use of Both Sharing Reduces Use of Both Essential and Less Essential Drugs and Essential and Less Essential Drugs and

Increases Risk of Adverse EventsIncreases Risk of Adverse Events

9

1514

22

0

5

10

15

20

25

Essential Less Essential

Elderly Low Income

Source: R. Tamblyn et al., “Adverse Events Associated With Prescription Drug Cost-Sharing Among Poor and Elderly Person,” JAMA 285, no. 4 (2001): 421–429.

Percent reduction in drugs per day

117

43

9778

020406080

100120140

Adverse Events ED Visits

Elderly Low Income

Percent increase in incidence per 10,000

25

THE COMMONWEALTH

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Increased Health Care Costs Have Increased Health Care Costs Have Reduced SavingsReduced Savings

Has increased spending on health care expenses in the past year caused you to do any of the following? Among those with health insurance coverage who had increases in health care costs in the last year (n=731) (percentage saying yes)

45%

34%

29%

26%

24%

18%

Decrease your contributions to a retirement plan, such as a 401(k),

403(b) or 457 plan, or an IRA

Have difficulty paying for other bills

Decrease your contributions to other savings

Use up all or most of your savings

Borrow money

Have difficulty paying for basic necessities, like food, heat, and housing

Source: EBRI Health Confidence Survey, 2005.

26

THE COMMONWEALTH

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Most Insured DonMost Insured Don’’t Have Quality and Cost t Have Quality and Cost Information to Make Informed ChoicesInformation to Make Informed Choices

36 (n = 76)15Doctors32 (n = 76)14Hospitals

Of those whose plans provide info on cost, how many tried to use it for:

4525Hospitals

5442Doctors

Of those whose plans provide info on quality, how many tried to use it for:

1215Hospitals

1216Doctors

Health plan provides information on cost of care provided by:

1514Hospitals

16%14%Doctors

Health plan provides information on quality of care provided by:

HDHP/CDHPComprehensive

Source: P. Fronstin, S.R. Collins, Early Experience with High-Deductible and Consumer-Driven Health Plans: Findings From the EBRI/Commonwealth Fund Consumerism in Health Care Survey, EBRI Issue Brief, December 2005.

27

THE COMMONWEALTH

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HSAs WonHSAs Won’’t Help the Uninsured for Whom Tax t Help the Uninsured for Whom Tax Benefits Are of Little Value: Benefits Are of Little Value:

Income Tax Distribution of UninsuredIncome Tax Distribution of Uninsured

55% (0% tax bracket)




1% (30%-39%

tax bracket)

Source: S.A. Glied, The Effect of Health Savings Accounts on Health Insurance Coverage, The Commonwealth Fund, April 2005.

28

THE COMMONWEALTH

FUND

HDHPsHDHPs WonWon’’t Solve the Cost Problem:t Solve the Cost Problem:Most Costs Are Concentrated in the Very SickMost Costs Are Concentrated in the Very Sick

0%10%20%30%40%50%60%70%80%90%

100%

U.S. Population Health Expenditures

1%5%

10%

55%

69%

27%

Source: A.C. Monheit, “Persistence in Health Expenditures in the Short Run: Prevalence and Consequences,” Medical Care 41, supplement 7 (2003): III53–III64.

Distribution of Health Expenditures for the U.S. Population, By Magnitude of Expenditure, 1997

50%

97%

$27,914

$7,995

$4,115

$351

Expenditure Threshold (1997 Dollars)

29

THE COMMONWEALTH

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Modifications to HDHP/HSAsModifications to HDHP/HSAsto Reduce Potentially Harmful Effectsto Reduce Potentially Harmful Effects

• Permit employers to lower deductibles for lower-wage workers and qualify for HSAs

• Exempt primary care as well as preventive services from the deductible; exempt prescription drugs essential for management of chronic conditions

• Guarantee choice of a comprehensive health plan to workers covered under employer plans

• Permit greater flexibility in benefit design (e.g. actuarially equivalent benefits)

• Set an income ceiling on eligibility for HSAs to reduce the tax subsidy for high income individuals

30

THE COMMONWEALTH

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Promising Strategies for Improving Promising Strategies for Improving Affordability and Achieving SavingsAffordability and Achieving Savings

• Better information on provider quality and total costs of care

• Pay-for-performance provider payment rewarding high quality and high efficiency

• Development of value networks of “high performing providers” under Medicare, Medicaid, and private insurance

• High cost care management and transitional care

• Improved access to primary care and preventive services

• Investment in health information technology• National Institute of Clinical Excellence –

evidence-based medicine

31Two in Four Adults Experience Inefficient, Two in Four Adults Experience Inefficient,

Poorly Coordinated, Unsafe CarePoorly Coordinated, Unsafe Care

42

25

19

17

17

0 25 50

Any of the above

Recommended unnecessarycare or treatment

Failed to provide importantmedical history or test results

to other doctors or nurses

Medical, surgical, medicationor lab test error

Ordered a test that hadalready been done

Percent of adults reporting a time they experienced each event in the past two years

Source: C. Schoen, S.K.H. How, I. Weinbaum, J.E. Craig, Jr., and K. Davis, “Public Views on Shaping the Future of the U.S. Health System,” The Commonwealth Fund, August 2006.

32

THE COMMONWEALTH

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256287

Insurance companies identify and reward doctors and hospitals who achieve excellence in the quality and efficiency of care

22

18

Somewhat important

6991You have information about the costs of care to you BEFORE you actually get the care

7795You have information about the quality of care provided by different doctors or hospitals

Very important

Total very or somewhat important

How important is it to you that: (percent)

Positive Public Views on the Need for Positive Public Views on the Need for Quality and Cost Information and Quality and Cost Information and

Payments that Reward PerformancePayments that Reward Performance


33Half of Middle and Lower Income Adults Half of Middle and Lower Income Adults Experienced Serious Problems Paying for Medical Experienced Serious Problems Paying for Medical

Bills or Insurance in Past Two Years Bills or Insurance in Past Two Years

1928 30

116

19

22 18

23

16

0

25

50

75

Total Less than$35,000

$35,000 –$49,999

$50,000 –$74,999

$75,000 ormore

Somewhat seriousVery serious

2127 31

1910

17

2019

15

13

0

25

50

75

Total Less than$35,000

$35,000 –$49,999

$50,000 –$74,999

$75,000 ormore

Somewhat seriousVery serious

38

50 48

33

21

38

48 50

35

23

Percent Percent

Medical Bills Health Insurance


34

THE COMMONWEALTH

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What Is the Top or Second Most Important Health What Is the Top or Second Most Important Health Care Issue for President and Congressional Action?Care Issue for President and Congressional Action?

12

14

14

29

3137

52

Total

12

10

16

29

3135

56

Less than$50,000

10

12

15

32

2742

52

$50,000-$74,999

10

18

13

30

3339

50

$75,000or more

Reform the medical malpractice system

Improve the quality of nursing homes and long-term care

Ensure that all Americans have adequate, reliable health insurance

Reduce the complexity of insurance

Ensure that Medicare remains financially sound long-term

Lower the cost of prescription drugsControl the rising cost of medical care

Percent listing issue as top or second priority:


35

THE COMMONWEALTH

FUND

Take Away MessagesTake Away Messages

• Closing gaps in insurance coverage is the number one priority

• Patients should have easy access to primary and preventive care; higher cost-sharing for primary care and lower cost-sharing for specialized care further distorts incentives

• Invest in quality improvement in chronic care, transitional care post-hospitalization

• Promote information technology and shared decision-making

• Reward high quality and efficient care• Forge public private partnerships to achieve

improved health system performance

36

THE COMMONWEALTH

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AcknowledgementsAcknowledgementsStephen C. Schoenbaum, M.D., Executive Vice President and Executive Director, Commonwealth Fund Commission on a High Performance Health System

Anne Gauthier, Senior Policy Director, Commonwealth Fund Commission on a High Performance Health System

Sara R. Collins, Senior Program Officer, The Commonwealth Fund and lead author, Gaps in Health Insurance: An All-American Problem, The Commonwealth Fund, April 2006; Early Experience with High-Deductible and Consumer-Driven Health Plans: Findings From the EBRI/Commonwealth Fund Consumerism in Health Care Survey, EBRI Issue Brief, December 2005.

Alyssa L. Holmgren, Research Associate, Commonwealth Fund

Visit the Fund at: www.cmwf.org

consumer driven care: potential and concernsoop expenses premium expenses note: among adults ages...

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