the commonwealth fund karen davis president, the commonwealth fund january 27, 2006 [email protected] ...

THE COMMONWEALTH

FUND

Karen DavisPresident, The Commonwealth Fund

January 27, [email protected]

Health Savings AccountsHealth Savings Accounts

2

THE COMMONWEALTH

FUND

Few Insured People Are Currently Covered by High Few Insured People Are Currently Covered by High Deductible Health Plans (HDHP) or Consumer Directed Deductible Health Plans (HDHP) or Consumer Directed

Health Plans (CDHP) with a Health Plans (CDHP) with a Savings AccountSavings Account

HDHP

9%

CDHP

1%

Comprehensive

89%

Note: Comprehensive = plan w/ no deductible or <$1000 (ind), <$2000 (fam); HDHP = plan w/ deductible $1000+ (ind), $2000+ (fam), no account; CDHP = plan w/ deductible $1000+ (ind), $2000+ (fam), w/ account.

Source: P. Fronstin, S.R. Collins, Early Experience with High-Deductible and Consumer-Driven Health Plans: Findings From the EBRI/Commonwealth Fund Consumerism in Health Care Survey, EBRI Issue Brief, December 2005.

3

THE COMMONWEALTH

FUND

Enrollees of HDHP/CDHPs Are Less Satisfied Enrollees of HDHP/CDHPs Are Less Satisfied with Their Coveragewith Their Coverage

8

28

63

2939

33 3226

42

0

20

40

60

80

Extremely or very

satisfied

Somewhat

satisfied

Not satisfied

Comprehensive HDHP CDHP


4

THE COMMONWEALTH

FUND

Enrollees of HDHP/CDHPs Are Less Satisfied Enrollees of HDHP/CDHPs Are Less Satisfied with Out-of-Pocket Costswith Out-of-Pocket Costs

21

3642

31

12

57

1828

54

0

20

40

60

Extremely or very

satisfied

Somewhat

satisfied

Not satisfied



5

THE COMMONWEALTH

FUND

Higher Deductibles Contribute to Failure Higher Deductibles Contribute to Failure to Receive Needed Careto Receive Needed Care

38 3630

21

0

20

40

60

$1,000 or more $500–$999 $1–$499 None

*Did not fill a prescription; did not see a specialist when needed; skipped recommended medical test, treatment, or follow-up; had a medical problem but did not visit doctor or clinic because of costs.Source: K. Davis, M.M. Doty, A. Ho, How High is Too High? Implications of High-Deductible Health Plans, The Commonwealth Fund, April 2005.

Percent who had any of four access problems* in past year because of costs

Deductible

6

THE COMMONWEALTH

FUND

Enrollees of HDHP/CDHPs Are More Likely to Enrollees of HDHP/CDHPs Are More Likely to Delay or Avoid Getting Health Care Due to Delay or Avoid Getting Health Care Due to

CostCost

2621

17

42

313135

4840

0

20

40

60

Total Health Problem <$50,000 Annual

Income



Percent of adults 21-64

(n = 61)

(n = 90)

7

THE COMMONWEALTH

FUND

Enrollees of HDHP/CDHPs Are More Likely to Enrollees of HDHP/CDHPs Are More Likely to Not Fill a Prescription Due to CostNot Fill a Prescription Due to Cost

2027

2116

323326 2526

0

20

40

60

Total Health Problem <$50,000 Annual

Income



Percent of adults 21-64

(n = 61)(n = 90)

8

THE COMMONWEALTH

FUND

Cost-Sharing Reduces Use of Both Essential Cost-Sharing Reduces Use of Both Essential and Less Essential Drugs and Increases Risk and Less Essential Drugs and Increases Risk

of Adverse Eventsof Adverse Events

9

1514

22

0

5

10

15

20

25

Essential Less Essential

E lderly Low Inc ome

Source: R. Tamblyn et al., “Adverse Events Associated With Prescription Drug Cost-Sharing Among Poor and Elderly Person,” JAMA 285, no. 4 (2001): 421–429.

Percent reduction in drugs per day

117

43

9778

0

20

40

60

80

100

120

140

Adverse Events ED V is its

E lderly Low Inc ome

Percent increase in incidence per 10,000

9

THE COMMONWEALTH

FUND

Higher Deductibles Associated with Higher Deductibles Associated with Medical Bill ProblemsMedical Bill Problems

54

4639

24

0

20

40

60

$1,000 or more $500–$999 $1–$499 N one

Source: The Commonwealth Fund Biennial Health Insurance Survey, 2003.

Percent of adults ages 19–64 with any medical bill problem or outstanding debt

Deductible

10

THE COMMONWEALTH

FUND

Sicker Adults with Higher Deductibles More Sicker Adults with Higher Deductibles More Likely to Report Medical Bill ProblemsLikely to Report Medical Bill Problems

59

4040

24

0

20

40

60


$500+ <$500 $500+ <$500

Sicker Not Sicker


11

THE COMMONWEALTH

FUND

Lower-Income with Higher Deductibles More Lower-Income with Higher Deductibles More Likely to Report Medical Bill ProblemsLikely to Report Medical Bill Problems

55

4337

27

0

20

40

60


$500+ <$500 $500+ <$500

Income Less Than $35,000 Income $35,000 or More


12

THE COMMONWEALTH

FUND

Enrollees of HDHP/CDHPs Spend Higher Percent Enrollees of HDHP/CDHPs Spend Higher Percent of Income on Out-of-Pocket Medical Expenses of Income on Out-of-Pocket Medical Expenses

and Premiumsand Premiums

9 13

2529

35

58

23 26

44

0

20

40

60

80

100

ComprehensiveHDHP

CDHP

ComprehensiveHDHP

CDHP

ComprehensiveHDHP

CDHP

10%+ of income 5-9% of income


Percent of adults 21-64 spending > 5% of income

Total Health Problem<$50,000

Annual Income

12

4231

17

3834

92

66

53

13 918 12 10

33 213 4

(n = 61)

(n = 90)

13

THE COMMONWEALTH

FUND

Increased Health Care Costs Have Reduced Increased Health Care Costs Have Reduced SavingsSavings

Has increased spending on health care expenses in the past year caused you to do any of the following? Among those with health insurance coverage who had increases in health care costs in the last year (n=731) (percentage saying yes)

45%

34%

29%

26%

24%

18%

Decrease your contributions to a retirement plan, such as a 401(k),

403(b) or 457 plan, or an IRA

Have difficulty paying for other bills

Decrease your contributions to other savings

Use up all or most of your savings

Borrow money

Have difficulty paying for basic necessities, like food, heat, and housing

Source: EBRI Health Confidence Survey, 2005.

14

THE COMMONWEALTH

FUND

Deductibles are Unlikely to Affect Health Care Costs Deductibles are Unlikely to Affect Health Care Costs Since Most Costs Are Concentrated in the Very SickSince Most Costs Are Concentrated in the Very Sick

0%

10%

20%30%

40%

50%

60%

70%80%

90%

100%

U.S. Population Health Expenditures

1%5%

10%

55%

69%

27%

Source: A.C. Monheit, “Persistence in Health Expenditures in the Short Run: Prevalence and Consequences,” Medical Care 41, supplement 7 (2003): III53–III64.

Distribution of Health Expenditures for the U.S. Population, By Magnitude of Expenditure, 1997

50%

97%

$27,914

$7,995

$4,115

$351

Expenditure Threshold (1997

Dollars)

15

THE COMMONWEALTH

FUND

Most Insured Don’t Have Quality and Cost Most Insured Don’t Have Quality and Cost Information to Make Informed ChoicesInformation to Make Informed Choices

Comprehensive HDHP/CDHPHealth plan provides information on quality of care provided by:

Doctors 14% 16%

Hospitals 14 15

Health plan provides information on cost of care provided by:

Doctors 16 12

Hospitals 15 12

Of those whose plans provide info on quality, how many tried to use it for:

Doctors 42 54

Hospitals 25 45

Of those whose plans provide info on cost, how many tried to use it for:

Doctors 15 36 (n = 76)

Hospitals 14 32 (n = 76)


16

THE COMMONWEALTH

FUND

Most Uninsured Unlikely to Benefit from Tax-Most Uninsured Unlikely to Benefit from Tax-Savings of HSAsSavings of HSAs

55% (0% tax bracket)




1% (30%-39%

tax bracket)

Source: S.A. Glied, The Effect of Health Savings Accounts on Health Insurance Coverage, The Commonwealth Fund, April 2005.

17

THE COMMONWEALTH

FUND

Health Care Opinion Leader Views on Solutions to Health Care Opinion Leader Views on Solutions to Uninsured and Health Care Cost ProblemsUninsured and Health Care Cost Problems

22%

22%

31%

31%

33%

44%

55%

56%

57%

82%

84%

Create new tax credits for the uninsured to purchase coverage inthe individual insurance market

Promote Health Savings Accounts

Malpractice reform

Have patients pay a substantially higher share of their health carecosts

Permit Association Health Plans to provide coverage withoutstate licensing

Have all payers, including private insurers, Medicare, andMedicaid, adopt common payment methods and rates

Expand existing state-based public insurance programs

Make information on comparative quality and costs available tothe public

Reward more efficient and high-quality medical care providers

Give incentives to employers to expand coverage

Let small businesses and individuals buy coverage throughFederal Employees Health Benefit Plan

Source: The Commonwealth Fund Health Care Opinion Leaders Surveys, April 2005, February 2005, and November-December 2004.

18

THE COMMONWEALTH

FUND

Promising Strategies for Improving Affordability Promising Strategies for Improving Affordability and Achieving Savingsand Achieving Savings

• Better information on provider quality and total costs of care

• Pay-for-performance provider payment

• Development of value networks of “high performing providers” under Medicare, Medicaid, and private insurance

• High cost care management and disease management

• Improved access to primary care and preventive services

• Limits on family premium and out-of-pocket costs as percent of income (e.g., 5% of income for low-income)

• Expanded group coverage and reinsurance

19

THE COMMONWEALTH

FUND

Modifications to HDHP/HSAsModifications to HDHP/HSAsto Reduce Potentially Harmful Effectsto Reduce Potentially Harmful Effects

• Permit employers to lower deductibles for lower-wage workers and qualify for HSAs

• Exempt primary care as well as preventive services from the deductible; exempt prescription drugs essential for management of chronic conditions

• Guarantee choice of a comprehensive health plan to workers covered under employer plans

• Permit greater flexibility in benefit design (e.g. actuarially equivalent benefits)

• Set an income ceiling on eligibility for HSAs to reduce the tax subsidy for high income individuals

20

THE COMMONWEALTH

FUND

Commonwealth Fund ResourcesCommonwealth Fund ResourcesCathy Schoen, Senior Vice President, The Commonwealth Fund and lead author, “Insured but Not Protected – How Many Adults Are Underinsured,” Health Affairs, June 14, 2005.

Sara R. Collins, Senior Program Officer, The Commonwealth Fund and lead author, The Affordability Crisis in U.S. Health Care: Findings from the Commonwealth Fund Biennial Health Insurance Survey, The Commonwealth Fund, March 2004; P. Fronstin, S.R. Collins, Early Experience with High-Deductible and Consumer-Driven Health Plans: Findings From the EBRI/Commonwealth Fund Consumerism in Health Care Survey, EBRI Issue Brief, December 2005.

Research assistance – Jennifer L. Kriss, Program Assistant, Commonwealth Fund

S.A. Glied, The Effect of Health Savings Accounts on Health Insurance Coverage, The Commonwealth Fund, April 2005.

K. Davis, M.M. Doty, A. Ho, How High is Too High? Implications of High-Deductible Health Plans, The Commonwealth Fund, April 2005.

Visit the Fund at: www.cmwf.org

the commonwealth fund karen davis president, the commonwealth fund january 27, 2006 [email protected] ...

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