NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Do "Consumer-Directed" Health Plans Bend the Cost Curve Over Time?

Amelia M. Haviland, Matthew D. Eisenberg, Ateev Mehrotra, Peter J. Huckfeldt, Neeraj Sood

NBER Working Paper No. 21031
Issued in March 2015, Revised in July 2015
NBER Program(s):Health Care, Health Economics

“Consumer-Directed” Health Plans (CDHPs) combine high deductibles with personal medical accounts and are intended to reduce health care spending through greater patient cost sharing. Prior research shows that CDHPs reduce spending in the first year. However, there is little research on the impact of CDHPs over the longer term. We add to this literature by using data from 13 million individuals in 54 large US firms to estimate the effects of a firm offering CDHPs on health care spending up to three years post offer. We use a difference-in-differences analysis and to further strengthen identification, we balance observables within firm, over time by developing weights through a machine learning algorithm. We find that spending is reduced for those in firms offering CDHPs in all three years post. The reductions are driven by spending decreases in outpatient care and pharmaceuticals, with no evidence of increases in emergency department or inpatient care.

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Document Object Identifier (DOI): 10.3386/w21031

Published: Amelia M. Haviland & Matthew D. Eisenberg & Ateev Mehrotra & Peter J. Huckfeldt & Neeraj Sood, 2016. "Do “Consumer-Directed” health plans bend the cost curve over time?," Journal of Health Economics, vol 46, pages 33-51. citation courtesy of

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