Dr. HSA

Guest Columnist, Roy Ramthun

Academy of Actuaries Validates Consumer-Driven Health Plans

June 2009 - Vol. 20

The Academy of Actuaries has released a public policy monograph that summarizes the results of the existing studies of consumer-driven health plans (CDHPs), focusing on the studies that are “based on historical claims data, use credible methodologies, and that provide reasonably detailed and relevant results.”  The monograph analyzes four main questions that are frequently raised regarding CDHPs.

Roy Ramthun

According to the Academy, all studies showed a favorable effect on cost in the first year of a CDHP.  CDHP trends ranged from -4 percent to -15 percent. Coupled with a control population on traditional plans that experienced trends of +8 percent to +9 percent, the total savings generated could be as much as 12 percent to 20 percent in the first year.  For savings after the first year, at least two of the studies indicate trend rates lower than traditional PPO plans by approximately 3 percent to 5 percent.

Generally, all of the studies indicated that cost savings did not result from avoidance of inappropriate care and that necessary care was received in equal or greater degrees relative to traditional plans. All of the studies reviewed reported a significant increase in preventive services for CDH participants. Three of the studies found that CDHP participants received recommended care for chronic conditions at the same or higher level than traditional (non-CDH) plan participants. Two studies reported a higher incidence of physicians following evidence-based care protocols.

Finally, the studies indicated that while the possibility for employer cost-shifting exists with CDHPs, (as it does with traditional plans) most employers are not doing so, and might even be reducing employee cost-sharing under certain circumstances.

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Academy of Actuaries Validates Consumer-Driven Health

About the author...

Roy Ramthun is President of HSA Consulting Services, LLC, a health care consulting practice specializing in Health Savings Accounts and consumer-driven health care issues. Mr. Ramthun is also a Visiting Fellow at the Council for Affordable Health Insurance. Click here for Roy's website.