Stephen Parente and Jon Christianson at the university's Carlson School of Management in Minneapolis and Roger Feldman at the School of Public Health's Division of Health Services Research and Policy will present their preliminary study results on consumer-driven plans on Monday, Sept. 15, in Washington, D.C., at a policy-makers' conference, "Consumer-Driven Health Care: Evidence from the Field," sponsored by AcademyHealth, the national program office for health care financing and organization supported by the Robert Wood Johnson Foundation.
In consumer-driven plans, employers allot an employee a given amount of money toward personal care or a health spending account to spend, at his or her discretion, on health care needs. By using this account to purchase health care services, employees become directly involved in health care decision-making. The plans also provide information on physician and hospital performance and procedure costs to help consumers use their money wisely. Unused funds roll over into the next year's pool, creating a greater amount the employee could spend.
Parente, Christianson and Feldman's studies focus on Minneapolis-based Definity Health, which is offered by the University of Minnesota and several other Minnesota companies. By examining preliminary data provided by some of the employers who offer Definity as an employee health care option, researchers learned that Definity was not disproportionately chosen by the young and the healthy. Instead, it was chosen more by higher-income families and was most popular among those ages 35 to 44. Initial results indicate that Definity's patient hospital admissions were also higher than expected. Researchers note that this point needs to be more extensively examined to make sure admissions are being accurately counted.
Higher admissions are one contributor to the higher average payment made by employers for consumer-driven plans, the researchers found. Employee payments are cheaper than health maintenance organizations and about the same or slightly less expensive than preferred provider organizations. Patient expenses, including pharmaceutical costs, are similar for each population. However, consumer-driven plans show an increase in demand for services, particularly prescription drugs, over time. In fact, 65 percent of Definity enrollees were more likely to call customer service for information or help, compared with 40 percent in other plans. And 44 percent used Definity's Internet site to monitor their personal care accounts.
Overall, employees and employers were positive about the consumer-driven plan, but not more than other health plans. The three key features enrollees looked for in their consumer-driven health plan were that their doctor was in their plan (77 percent), no referrals were needed (51 percent) and preventive services were covered (47 percent). Seventy percent said it was easy to use the personal care account to pay for health services. Following are some additional findings:
- Definity employees are sensitive to premium differences among competing health plans.
- Employees and families with chronic conditions are more premium-sensitive.
- Of Definity members who thought they would have money left at the end of the year, 76 percent turned out to be right. Similarly, 76 percent of those who predicted they would not have money left at the end of a year were right.
- Forty-seven percent of Definity enrollees use flexible spending accounts, versus 35 percent of enrollees in other health plans.
These findings are the initial results of a two-year research project to provide an unbiased evaluation of the early impact of consumer-driven health plans. Additional results on the experience of "early adopter" employers with consumer-driven plans will be assessed through the use of interview data and are expected to be released in 2005.
Catherine Peloquin, Carlson School of Management, (612) 626-0556
Ruth Taylor, Center for the Study of Healthcare Management, (612) 624-1532
Deane Morrison, University News Service, (612) 624-2346
Stephen Parente, Jon Christianson and Roger Feldman: contact through Catherine Peloquin