The Effects of Consumer-Directed Health Plans on Health Care Spending
We use unique data from an insurer that exclusively offers high-deductible, "consumer-directed" health plans to identify the effect of plan features, notably the spending account, on health care spending. Our results show that the marginal dollar in the spending account is entirely spent on outpatient and pharmacy services. In contrast, inpatient and out-of-pocket spending were not responsive to the amount in the spending account. Our results represent the first plausibly causal estimates of the components of consumer-driven health plans on health spending. The magnitudes of the effects suggest important moral hazard consequences to higher spending account levels.
We gratefully acknowledge numerous helpful suggestions from Tom Buchmueller, Roger Feldman, Will Manning, Steve Parente, and seminar participants at the American Economic Association annual meeting, the AcademyHealth annual research meeting, Rochester University, the Southeastern Health Economics Study Group, Tulane University, University of Illinois at Chicago, University of Minnesota, and the National Economists Club in Washington DC. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.
Anthony T. Lo Sasso & Lorens A. Helmchen & Robert Kaestner, 2010. "The Effects of Consumer-Directed Health Plans on Health Care Spending," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 77(1), pages 85-103. citation courtesy of