Optimistic outlook for consumer-driven health care

Washington -- Health insurance brokers see consumer-driven health plans as increasingly attractive products for their customers, many of them employers beset by steep increases in the cost of their workers' health benefits, according to a recent survey for the National Assn. of Health Underwriters.

The past year has changed many brokers' opinions about just how far consumer-driven offerings are from broader adoption. One year ago, 80% said these plans were five or more years away from being a mainstream option, but the new survey shows that 77% think the plans will be adopted more widely in the near future.

The survey found that respondents expected 41% of large employers to begin offering consumer-driven options next year. These types of plans typically include high-deductible coverage tied to financial incentives that encourage patients to make cost-effective choices about their health care.

Consumer-driven plans currently constitute less than 2% of the market for private insurance, said the survey's author, Michael Main, managing partner at ChapterHouse, a Chicago consulting firm.

Current statistics show that about 3 million people have such insurance, said Doug Kronenberg, chair of the Consumer-Driven Health Care Assn., a trade organization based in Norwalk, Conn. He is also chief strategy officer at Lumenos, one of the leading providers of consumer-driven plans.

"For those of us that have been doing this for the past five years, that feels like a slow build, but all of the indications are that this is going to now begin to turn and head up," Kronenberg said.

The reason the trend seems to be changing is interest in health savings accounts, one type of consumer-driven plan. HSAs, which combine a tax-free savings account with high-deductible health insurance, have been available for a little more than a year. Preliminary surveys show that HSA sales have already surpassed the 3 million enrollee mark for other types of consumer-driven plans.

Companies that adopt consumer-driven insurance experience definite monetary benefits. These plans can halve the cost of benefit inflation, Kronenberg said.

"The first thing that you see is ... a reduction in utilization," he said. "For instance, we see about 92% generic drug substitution when people are spending their own money."

Some consumer advocates are concerned about HSAs and other consumer-driven plans.

People might avoid getting needed health care because they are spending their own money, said Mila Kofman, assistant research professor at Georgetown University's Health Policy Institute.

That could sometimes be more a matter of personality than dollars, said AMA Trustee Joseph Heyman, MD, who recently purchased a health savings plan for himself.

"There are some people who go to the doctor too much, and there are people who don't go at all," he said. "My concern would be for the person who can't afford to go. If they have money to pay for care, that's what is important."

Dr. Heyman said it had taken a lot of research to decide that an HSA was appropriate for him. This product might not be suitable for everyone, especially low-income individuals who could have difficulty meeting high deductibles, he added.

AMA policy is to encourage employers to consider offering HSAs as one of their insurance options for employees, and the Association generally supports market reforms that enable innovative approaches to health care coverage.

According to Georgetown's Kofman, for low-wage workers, HSA plans raise the risk that families will have medical bills they can't afford.

The NAHU survey showed that 29% of HSAs sold by one company were purchased by people with household incomes of less than $50,000, a finding that concerns her.

"It's very dangerous if low- or even moderate-income people are buying these things," she said.

That might be a concern for physicians and hospitals because there is the potential that they could see more bad debt from these patients, said ChapterHouse's Main.

Another obstacle for consumer-driven plans, according to the survey respondents, is the lack of available cost and quality information on which patients can base their decisions about which doctor or hospital to choose.