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Monday, May 5, 2008

CDHPs: Only "Modest" Savings

The consulting firm Milliman has produced a report showing only modest savings from Consumer-Directed Health Plans (CDHPs).

This is significant, since a lot of companies have switched to consumer directed plans, which use high deductibles and tax-advantaged health savings accounts (HSAs) to make plan members more price sensitive "customers" of health care services. This presumably would drive costs down.

The essential conclusion of the report is that young and healthy people are more likely to choose such plans, and they account for only a very small percentage of a company's health care claims. This has left savings far less than what was anticipated, Milliman found.

Also, there is little information available now that can help people make smart choices based on cost and quality.

Watson-Wyatt and Rand Corp. produced a report with some good advice for implementing CDHPs. It takes a lot of communication to help employees understand CDHPs, they found.

These findings about consumer driven health plans are politically significant since GOP nominee-to-be John McCain is a big supporter of CDHPs, making them a part of his plan to bring health care costs under control. Here's an excerpt of McCain's health care plan:

John McCain Will Encourage And Expand The Benefits Of Health Savings Accounts (HSAs) For Families. When families are informed about medical choices, they are more capable of making their own decisions and often decide against unnecessary options. Health Savings Accounts take an important step in the direction of putting families in charge of what they pay for.

Neither Democrat in the race for the nomination, Hillary Clinton or Barack Obama, supports CDHPs.

1 comment:

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