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.”