Consumer Directed Health Plans (CDHPs) are quickly becoming a popular benefit option for U.S. employers. These high-deductible plans are one of the fastest-growing benefit options for employees. To explore their effectiveness, we conducted a study using the MarketScan® Commercial Claims Database. The study closely matched members enrolled in a CDHP to members continuously enrolled in a non-CDHP, and evaluated healthcare costs and utilization over three years. We found a direct link between CDHPs and lower healthcare costs. On average, CDHP enrollees incurred $457–$532 less per member per year.
But these savings might come with consequences. Utilization rates were lower among CDHPs for a wide range of services — including professional visits, lab services, non-maternity admissions, and prescription drugs — suggesting that consumers may be reducing utilization across the board as opposed to simply avoiding unnecessary care. Of particular concern, members enrolled in CDHPs were less likely to receive any medical care for their existing chronic conditions than were their non-CDHP counterparts (based on a review of eight common conditions — asthma, congestive heart failure, coronary artery disease, depression, diabetes, hypertension, low back disorders, and osteoarthritis).
Although the benefits of CDHPs are substantial, these arrangements need to be entered into carefully. It is important to recognize that a CDHP design could result in members not receiving recommended care — and that could lead to higher costs in the future. If your company currently offers or is contemplating a CDHP, we suggest that you consider the following:
- Educate enrollees so they fully understand and take advantage of their benefits, specifically benefits of covered preventive services.
- Engage CDHP members to ensure they are continuing to manage chronic conditions while enrolled in a CDHP. The study suggested CDHP members received less care for current chronic conditions and were less likely to be diagnosed with new chronic conditions.
- Recognize that each employee is unique, so a CDHP might not be the best choice for all members. Help individuals choose the right plan based on their current health and their healthcare plan history.
- Provide useful tools, such as cost calculators, to make it easier for members to access information on physician cost and quality.
For the full study on the impact of CDHPs on cost, utilization and care, click here.
Consumer-Driven Health Plans (CDHPs) are one of the fastest growing benefit options offered to employees – and soon may become the dominant plan type. In fact, a recent Kaiser/HRET survey found that CDHP enrollment has gone from just 4 percent of all employees who were given that option in 2006 to 20 percent in 2013.
In order to ensure CDHP members can effectively engage in their healthcare, employers must provide participants with timely access to consumer information tools to help them understand the range and cost of treatments available through plan providers and also information about provider quality. In the absence of this kind of help, CDHP participants are faced with a daunting task to make effective care decisions.
In addition to employees becoming more educated about their own healthcare, the companies they work for are offering new options that provide incentives and potential savings for the enrollees, as well as the employer itself. As part of a recent survey of Truven Health MarketScan™ data contributors, 64 percent of companies stated that they currently offer one or more CDHP options, and 76 percent stated that they will offer one or more in the future. The majority of these options consist of CDHP or high-deductible health plan (HDHP) with a health savings account (HSA) feature.
This type of growth is leading to a new paradigm in which more patients are taking on a greater role in treatment decision-making. For instance, under a traditional PPO plan in the past, it was very likely that a breast cancer diagnosis would result in a set course of action. However under a well constructed CDHP, the patient can make assessments based on the price she is willing or able to pay, the quality of treatment and providers, and even the best locations to receive the necessary treatment. With the help of her doctors and advisors, she can decide what’s best for her. She is engaged in her own plan for her health and treatment.
As this substantial shift continues, employers have the ability to empower their employees by providing the opportunity for them to be engaged in their own healthcare decisions, leading to cost-savings for the employee — and the organization.
To learn more about achieving year-round engagement with your employees, please access this complimentary insights brief from Truven Health Analytics.
Senior Director of Practice Leadership