Changing to High Deductible Health Plans (HDHP)

Are you aware of the impacts that can happens when employers change to High Deductible Health Plans (HDHP)?

written 03/03/2016
When an employer changes to a High Deductible Health Plan (HDHP), we see a decrease in the utilization of medical services from employees. In a report published by the Center for Disease Control, the number of uninsured decreased by almost 8 million Americans from 2014 to June of 2015 ¹. Despite the rising number of insured Americans, there has also been a drop in the number of emergency room visits and prescription expenditures². While these results appear to be an improvement in how the healthcare dollar is utilized, Handel opposes this idea by emphasizing the adverse effects of higher-cost sharing that has led to a reduction in healthcare costs in all the wrong ways.

While one of the intentions of cost-sharing is to reduce the use of unnecessary medical services, patients did not react to this shift by price-shopping, nor did they increase communication with their doctors about the necessity of care. Instead, they reduced their consumption of medical services (Handel, 2016). Lower expenditures in certain areas of healthcare, such as unnecessary imaging and redundant testing, suggests that this purpose is being achieved. However, research shows a decrease in preventive care-related expenditures, as well as other areas where lower utilization of these services is not a favorable outcome. The highest percentage of healthcare dollars was cut among the top 25% of the sickest consumers, who cut their healthcare expenses by 25%. Research also shows that the top percentage of spenders typically suffers from multiple chronic conditions³.  Handel reports that this population cut spending early in the year, before hitting the deductible, but spent more after. In this situation, an individual has now spent the same out-of-pocket amount, but perhaps did not access the care at the time most needed or advised. This cost shift is suggested to be caused by the misperception of health risk, as well as a misperception as to how their new plan works.

In changing to HDHPs, this population faces barriers that do not allow them to transition from being a passive patient to an active consumer of healthcare. Cost-sharing is able decrease the ever-rising healthcare expenditures. However, when shifting to these plans, patients need to be armed with the proper tools to do so. With education and support from a team of advocates, the Integrated Health Advocacy Program (IHAP) aids these individuals on how to best manage their conditions. Taking a patient-centered approach, IHAP works with the participant and their current providers to address the adversities many people with multiple chronic conditions tend to face. IHAP has also proven to not only increase self-efficacy and quality of life among participants, but saves the employer healthcare dollars.

1. Martinez, M. E., & Cohen, R. A. (2015). Health Insurance Coverage: Early Release of Estimates from the National Health Interview Survey, January to June 2015.
2. Handel, B. (2015). Health care cost-sharing prompts consumers to make big cuts in medical spending. The Conversation. Accessed from: https://theconversation.com/health-care-cost-sharing-prompts-consumers-to-make-big-cuts-in-medical-spending-41657
3. Schoenman, J. (2012). The Concentration of Health Care Spending. NICHM Foundation Data Brief July 2012. Accessed from: http://www.nihcm.org/pdf/DataBrief3%20Final.pdf.