Judgment Day for Health Care Consumerism. By David B. Kendall, PPI's senior fellow for health policy
Progressive Policy Institute, Jan 29, 2009
Conservative thinkers have touted medical savings accounts (later called health saving accounts) as the answer to the woes of U.S. health care. Twelve years after their first enactment in 1997, it's time to assess their success.
The judgment of two health care economists is that they have failed to solve the problem, yet they have not proven as bad as it their critics feared. Writing in Health Affairs, health economists James Robinson and Paul Ginsburg show how they have melded into the existing dysfunctional market dominated by managed care. They have ended up complementing managed care rather than replacing it.
A typical health savings account combines a high-deductible health insurance plan with a tax-free account for any money that a consumer doesn't use for health care. Initially, the idea was that patients would choose health care services directly from providers without any interference from an insurance company. Instead, most such plans use a network of doctors with whom insurance companies pre-negotiate prices and review the use of costly services.
Health savings accounts were supposed to put patients in charge of their health and health care, but instead employers and employees have opted for management services for chronic diseases. They have also incorporated prevention programs that provide employees with support services to encourage healthy habits.
Even with these embellishments, health savings accounts and similar programs have not grown large enough to change the entire health care marketplace. They have not proven popular enough to be a foundation for the kind of overhaul that health care needs. But they have contributed to the knowledge about what can and cannot reform health care.
Here is Robinson and Ginsberg's conclusion:
Health care should be consumer driven for reasons of both efficiency and ethics. When in possession of adequate information and faced with appropriate incentives, consumers make better choices for their own health than does any third party, be that third party motivated by the most praiseworthy of intentions. Moreover, as a matter of ethics, it is the patient and consumer, not the physician or insurer or employer or regulator, who should be vested with the right to make tradeoffs in the emotionally and sometimes spiritually charged domain of health care. That said, one must acknowledge that consumers often need support if their choices are to promote their well-being and constraint when they are spending other people's money. Health care is complex at best and not infrequently rife with nontransparent, anticompetitive, and even fraudulent behavior on the part of the many self-interested agents. Individual consumers can benefit from some of the efforts by governmental and employer sponsors, health insurance plans, provider organizations, and medical management programs. Consumers need others to create meaningful products and processes from which they can choose -- bundles of products and services that can be measured, priced, purchased, and used not only by the highly educated and motivated individual but by those who are sick and scared, of only modest means and financial sophistication.
Consumerism has a role in reform, but it won't work as an overriding ideology. It will take public action to enable private solutions that can truly solve the cost, quality, and access problems in U.S. health care. That's the platform that health care reform needs in 2009.
For more information:
Consumer-Driven Health Care: Promise And Performance, by James C. Robinson and Paul B. Ginsburg, Health Affairs, January 27, 2009
Friday, January 30, 2009
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You are simply wrong in your facts, David. This is what I wrote about the Health Affairs article in my newsletter this week.
ReplyDeleteJamie Robinson and Paul Ginsburg have paired up in Health Affairs to take another shot at consumer driven health care. This is one of the most peculiar articles I’ve read on the subject. You can tell which author wrote which part of the piece. Paul Ginsburg of the Center for Health System Change has long been a skeptic, but willing to look at the evidence. Jamie Robinson of UC Berkeley, on the other hand, has been foaming-at-the-mouth hostile to all of this stuff. About a year and a half ago he gave a speech to the Consumer Driven Summit where he declared the death of CDHC in favor of what he termed “managed consumerism.” He had a list of about ten particulars, but as we wrote at the time, he was wrong on every single one. He just hadn’t bothered to look at the evidence.
This article continues in that vein. It does a fairly good job of describing the vision of the advocates of CDHC and concedes that we are addressing the right problems. For instance, in their conclusion the authors agree that, “When in possession of adequate information and faced with appropriate incentives, consumers make better choices for their own health than does any third party, be that third party motivated by the most praiseworthy of intentions. Moreover, as a matter of ethics, it is the patient and consumer, not the physician or insurer or employer or regulator, who should be vested with the right to make trade-offs in the emotionally and sometimes spiritually charged domain of health care.” But they object to, “The obdurate insistence on รก la carte choice and retail purchasing pushed the theorists of consumerism into positing organizational and market dynamics that have not been observed in the real world.” They are hoping against hope that insurance companies will continue to be the Big Daddies of the health care system.
My bigger objection to the article is the way the authors cherry-pick and mischaracterize the available evidence. They try to make the case that CDHC adoption has been “anemic,” but they do so by purposefully overlooking the available data. They acknowledge that, “The HDHP represents the most important product innovation in health insurance since the point-of-service (POS) product, (but) the HDHP has been a disappointment in terms of actual sales.” To support that idea they cite AHIP’s census of HSA-qualified health plans. But AHIP counts ONLY plans that are HSA-qualified. It does not count HRA plans or stand-alone HDHPs. In fact, the CDC’s annual NHIS survey found that over 20% of the under-65 population were enrolled in HDHPs as of the middle of 2008. Ain’t nuthin “anemic” about that. This finding was confirmed by the KFF/HRET annual survey of employers that found 18% of workers are in HDHPs. The authors had the KFF/HRET survey right in front of them and cited it in arguing that only 8% of workers are in “HDHPs with a savings option!” But they didn’t say that “savings options” are “the most important product innovation,” they said HDHPs are. As critics have rightly pointed out, there is no advantage in having a tax-favored savings account for a person who pays no taxes. But the behavioral impact of the HDHP applies with or without the savings option.
Even more astonishing is the authors’ complete disregard of those behavioral changes, which have been well documented by the parties best positioned to measure it. Just in the past few months reports have been released by the Mercer Company, WellPoint, CIGNA, the Blue Cross Blue Shield Association, United Healthcare, Aon Consulting, and even the chronically skeptical EBRI, all showing that people in CDHPs pay more attention, seek out information, participate in wellness and prevention programs, choose lower-cost treatments, and save substantial amounts of money for themselves and their employers.
If Messrs Ginsburg and Robinson are what passes for scholarship these days, no wonder the country is in trouble.