Consumer-directed health plans (CDHPs) have recently become popular in health insurance, with 30% of covered employees enrolled in CDHPs in 2017. These plans have high deductibles, lower premiums, and a health spending account which is usually tax-incentivized. They expose enrollees more directly to healthcare prices, theoretically encouraging them to use fewer low-value healthcare services.
A recent study investigated this theory by measuring whether medical professionals were to less likely to choose CDHPs for themselves. If medical professionals were not even confident in their ability to make high-value healthcare decisions, it would be unrealistic to assume that lay people would be able to do so.
The authors looked at health plan choices among UCLA employees and found that both physicians and nurses were less likely to choose CDHPs than other comparable employees (1.6% less likely and 1.9% less likely, respectively) after controlling for income and other confounding factors. Only the difference between physicians and non-medical faculty was statistically significant. The authors saw this relative aversion to CDHPs by healthcare professionals as evidence that the basic assumptions behind CDHPs may be invalid, although they conceded that their conclusions were limited due to lack of data on the cognitive processes affecting individual decision-making.
This study provides valuable insight into the validity of the conceptual underpinnings of CDHPs, but it has several limitations. The study looked at employees who chose one of four major health plans offered by UCLA, so the quality of the non-CDHP plans may have had substantial influence on employee decisions. These plans likely had different provider networks, which could have also affected employee plan choice. The study also considered UCLA’s catastrophic insurance plan as an alternative to the CDHP in its initial model, even though factors driving employees to CDHPs, such as increased risk-tolerance, may be the same ones driving them to catastrophic plans. When the authors excluded employees who chose the catastrophic plan from the model, the results were no longer statistically significant. Even with these limitations, however, this study raises important questions about the ability of ordinary consumers to choose high-value health care, an important assumption of the CDHP model.
This Policy Prescriptions® review is written by Alexander Alexander as part of our collaboration with the Health Policy Journal Club at Baylor College of Medicine. Mr. Alexander is a first year medical student.
OBJECTIVES: Aiming to increase healthcare value, consumer-directed health plans (CDHPs)-high-deductible health insurance plus a personal spending account-equip enrollees with decision-support tools and expose them to the financial implications of their medical decisions. This study examines whether medically knowledgeable consumers are more or less likely to select a CDHP than individuals without medical knowledge.
STUDY DESIGN: Using University of California Los Angeles (UCLA) human resources data, our observational cross-sectional study analyzed the health plan enrollment choices of 3552 faculty and 8429 staff employees.
METHODS: We compared CDHP selection in 2 cohorts: 1) physicians and nonphysician faculty and 2) nurses and nonmedical staff. We used probit regression models to predict CDHP selection, adjusted for job title, demographics (ie, age, gender, race/ethnicity, education, employee income), and coverage type (eg, single).
RESULTS: Approximately 5% of UCLA employees chose the CDHP. After adjusting for sociodemographic characteristics and coverage type, physicians were less likely to choose these plans than nonmedical faculty, when all other covariates were fixed at their means (predicted probability change [?P], -1.6%; standard error [SE], 0.8%; P = .05). Nurses also appeared less inclined to choose these plans than nonmedical staff, which approached statistical significance (?P, -1.9%; SE, 1.0%; P = .07).
CONCLUSIONS: Overall low rates of CDHP selection were observed in consumers with and without medical knowledge. Although physicians and nurses seem to be better positioned as CDHP consumers, they appeared less likely to select these health plans compared with nonmedical faculty and staff in our study.