Activating Consumers with Financial Control: Lessons from Health Savings Accounts

Wendy Lynch

Posted 3/6/12 on the Altarum Institute Health Policy Forum

Health Savings Accounts are growing up. No longer an oddity, millions of families have accounts funded by tens of thousands of employers (1). After almost a decade, the cumulative evidence about consumer-directed health plans is quite compelling. For those waiting and wondering if CDHPs “work,” three recent reports provide a convincing answer.

The Chief Medical Officer for Cigna health plans said this about one study: “Each year the evidence increasingly shows that properly designed consumer-driven health plans can lower health risks, reduce medical costs and drive engagement. The data once again shows that the combination of incentives, easy-to-engage health programs and consumer decision support tools can improve health while reducing costs.” (2)

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Employers Will Offer More Consumer-Directed Health Plans in 2012; They Should Enhance Tools, Too

Jane Sarasohn-Kahn

First posted 8/22/11 on Health Populi

The good news: U.S. employers’ forecast their health benefit costs will grow at a slower pace in 2012 than in 2011, 7.2% versus 7.4%. The bad news: that’s only a 0.2% slowdown, and it’s still twice the rate of overall price inflation.

Furthermore, workers’ wages have been stagnant over the year, and the price of food and home goods haven’t stayed even, either.

The National Business Group on Health’s survey of American employers finds that managing health costs continues to be a front-burner issue for business. Controlling those costs is a strategic imperative for businesses, large and small. Thus, in 2012, employers will put an even sharper focus on tactics to bring health care costs down — that is, their health care costs. Workers’ costs for health will rise, as a result.

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The Myth of Consumer-Directed Care


Originally published 1/13/11 on Health Populi

The theory behind “consumer-driven health care” is that when the health care user has more financial ‘skin in the game,’ they’ll become more informed and effective purchasers of health care for themselves and their families. That theory hasn’t translated into practice, based on data from the Employee Benefits Research Institute’s (EBRI) latest Consumer Engagement in Health Care Survey.

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Will Consumerism Save Health Care


Originally published 2/27/06 on The Health Care Blog

Note: Jane’s report, above, on the ideological conceit that higher deductibles makes for more careful health care purchasers, reminded me that I dove into the topic early on, and pointed out the ramifications for the chronically ill and low income patients. The idea was cooked up by the conservative John Goodman of the National Center for Policy Analysis – his blog boasts that he is the “Father of Health Savings Accounts – and then spread by the right, with the wholesale enthusiasm of health plans. The irony is that we’ve learned since that high deductible health plans can work well, but they need to be provided in concert with free (or nearly free) comprehensive primary care, with the HSA dollars conserved so they’re available for more serious conditions. Here’s what I wrote five years ago.

In January’s State of the Union Address, President Bush called for expanding Health Savings Accounts (HSAs) as one sensible approach to curb rising healthcare costs. An HSA is a tax-favored healthcare-dedicated savings account that a patient controls. Combined with out-of-pocket requirements and a High Deductible (also called “Consumer Directed”) Health Plan (HDHP), these financing devices can provide comprehensive coverage. Federal 2006 HDHP family coverage guidelines call for deductibles of at least $2,100, with maximum out-of-pocket expenses of $10,500. To his credit, the President also proposed tax changes that would give individuals the same advantages employers already enjoy when they buy health insurance.
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