Pyenson
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National Reports — Consumer-driven health plans (CDHPs) do not currently produce dramatic savings compared with what would be expected from high-deductible
plans, according to experts.
Recent Milliman analysis of employer programs that offer employees a choice of CDHPs or non-CDHPs, shows that when offered
as a new choice, CDHPs deliver a modest 1.5% in savings beyond non-CDHPs based on typical risk- and benefit-adjustment factors.
This contrasts with the more dramatic savings that CDHPs appear to bring if certain adjustments are not taken into account.
Fronstin
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"This is not surprising, because the information for health consumers to be more savvy buyers is not readily available," says
Bruce Pyenson, FSA, principal and consulting actuary, Milliman Inc. Until members can compare and shop for providers' quality
and cost, CDHP savings likely are to remain limited to the reduced utilization expected from high-deductible plans, Pyenson
believes.
"A basic philosophy of CDHPs is that if consumers are empowered with information and incentives, they will be better consumers—but
they need the information," he points out. "We also found that healthier people tend to choose CDHPs. That's not surprising
because it repeats the decades-long pattern that healthier people tend to choose new options, whether it is HMOs or high-deductible
plans." When offered in a multi-option environment, the apparent savings that CDHPs options show are really from selection of healthier
lives and cost-shifting, Pyenson explains. "Aggregate costs, including cost-sharing, taken across all options, could easily
increase," he says. "In the short-term, a significant challenge for managed care executives is to make sure the sales people
are correctly setting buyers' expectations.
"Of course, in a multi-option environment, inertia and risk aversity and uncertainty play an important role—many consumers
do not immediately pick the option that benefits them the most," Pyenson continues. "Chaotic consumer behavior is not unique
to health insurance. The relatively slow uptake of CDHPs has frustrated some insurers but has reassured others."
Managed care executives should compare the potential value of various investments, including CDHPs, Pyenson advises. "CDHPs
are another insurance policy option that will be attractive to some buyers. However, CDHPs will not replace effective utilization
management and network management as cost-control mechanisms—CDHPs will emerge as a tool that sometimes complements and sometimes
complicates those core techniques."
