Do “Consumer-Directed” Health Plans Bend the Cost Curve Over Time?
“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.
This study was funded in part by a grant from the National Institute of Aging (NIA) and the NIH Common Fund for Health Economics (Grant R01-AG043850). Prior grants from the California Health Care Foundation and the Robert Wood Johnson Foundation enabled the construction of the data source for this study. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
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