When a large, self-insured U.S. firm forced its employees to switch from an insurance plan that provided them with free healthcare to a high-deductible plan, the result was that the employees cut back on healthcare services, including potentially valuable care, according to a study published by the National Bureau of Economic Research.
At the same time, there was no evidence that those employees, who were now paying out-of-pocket until they reached their deductible, price-shopped for lower-costing services.
The study analyzed data from 2009 to 2014 on approximately 56,000 employees and their 105,000 dependents. It found that the switch from a generous, no-cost-sharing insurance plan to a high-deductible plan reduced healthcare spending by $100 million per year.
The reduction occurred across the healthcare spectrum, with spending cut on inpatient care (7-11 percent), outpatient care (6-12 percent), emergency services (25 percent), pharmaceuticals (15-17 percent) and preventive health (5-8 percent).
One argument for high-deductible plans is that given financial incentives, consumers will price shop and look for less expensive providers. But the study found that wasn't the case even though employees were provided a comprehensive price shopping tool.
Instead, the experiment produced spending reductions through outright quantity reductions, with consumers receiving less medical care, the study found. That included reductions in preventive care. For example, employees reduced colonoscopies by 31.6 percent and preventive care with a prior diagnosis, such as diabetes, by 12.2 percent. Meanwhile, services that many consider potentially wasteful, such as imaging services for MRIs and CT scans, decreased by 17.7 percent.
The study findings back up concerns that consumers are foregoing medical care because of high-deductible insurance. While that may reduce overall medical expenses, in the long run it may actually increase costs if consumers skip preventive services and treatment for chronic conditions.
To learn more:
- read the study