By Zack Buck
Last week, the New York Times highlighted a recent study by Zarek C. Brot-Goldberg, et al., with fascinating implications for cost control within American health care. The paper, entitled, What Does A Deductible Do? The Impact of Cost-Sharing on Health Prices, Quantities, and Spending Dynamics, and posted by the National Bureau of Economic Research, shares that while deductibles do cause patients to use less health care, the type of health care that patients cut represents both high-quality, high-value care as well as low-value, wasteful care.
The study tracks the results of an insurance switch by a large employer—from a plan that provided free health care to a high deductible plan for its employees—and noted that the switch reduced overall spending by about 12 percent. However, while spending dropped, beneficiaries were cutting the wrong type of health care. The authors concluded that there was “no evidence of consumers learning to price shop after two years in high-deductible coverage,” finding that the beneficiaries “reduced low-value medical services and medically important ones at about the same rate, raising questions about their long-term health.” According to the authors, “90 percent of all spending reductions occur[red] in months that began under the deductible.”
The findings of this study come at a time when many are claiming that their health insurance plan deductibles—widely held to be a key tool in cutting down on unnecessary care—are simply too high. As Robert Pear noted in November, the number of plans offered through the health insurance exchange with deductibles of $3,000 or more is “more than half,” causing a number of Americans to claim that their health insurance is too expensive to use. And as a result, these plans may begin to resemble emergency accounts—like catastrophic health insurance plans—pushing patients into making hard decisions about seeking care. For sure, the median deductibles in Miami, Florida, and Jackson, Mississippi top $5000—making perspective consumers hesitant to purchase insurance, noting they may be in better shape “not purchasing that insurance and saving money in case something bad happens.”
Indeed, this follows last week’s reporting that only 12.7 million Americans purchased health insurance on the health insurance marketplaces during this year’s open enrollment period. This was far short of the baseline estimate in the spring of 2015 that projected 21 million enrollees by 2016.
Notwithstanding the wisdom of incorporating high deductibles into health insurance plans offered on the health insurance exchanges, this newest study seems to support a conclusion that has been put forth many times before (specifically here and here)—particularly, that patients are not good consumers.
Why do the authors (or any other expert) expect that consumers are the ones making financial healthcare decisions, aside from once a year at most to choose a new policy. After that decision, the consumer has only one action that can be taken, avoidance. Doctors can’t provide real time price information to the consumer when they need it (in the office, discussing a plan and options).