Even though high-deductible insurance options could save patients thousands of dollars every year, most people are not shopping around.
An increasingly popular form of health insurance touted for its money-saving potential has not reduced spending on unnecessary medical services, a new study shows.
Researchers from the USC Schaeffer Center for Health Policy and Economics and the RAND Corp. found that consumer-directed, high-deductible health plans have little or no effect on curbing spending on 26 services that medical professional and industry groups have deemed “low value.”
The researchers compared patient spending on unnecessary medical services, such as an MRI for lower back pain or imaging for an uncomplicated headache, before and after they switched from a traditional insurance plan to a consumer-directed health plan — a form of high-deductible insurance.
The study, published in The American Journal of Managed Care, is the latest of several to indicate that high-deductible plans are falling short of their promises of significant savings.
Recent work by researchers at USC Schaeffer Center, the USC Price School of Public Policy and the USC School of Pharmacy have found that most consumers on high-deductible plans are not comparing prices to find the best deals on services or on prescription drugs, even though the research indicates that some patients could potentially save hundreds or thousands of dollars per year.
Unnecessary services add up to an estimated $750 billion in wasteful healthcare spending each year, according to the National Academy of Sciences. Examples of the unnecessary services in the list of 26 that the researchers tracked were T3 testing for hypothyroidism, a spinal injection for low-back pain and stress testing for stable coronary artery disease.
Patients on consumer-directed health plans share more costs for their care than patients on traditional plans as they pay a higher deductible. With the high-deductible plan, a patient can open a pre-taxed healthcare savings account and use it to pay for out-of-pocket medical services. This type of plan is often pitched as way to give consumers more skin in the game, presuming they will shop and compare prices for services or skip unnecessary care and therefore spend less.
Enrollment in these plans has risen dramatically in the last decade, with a nearly seven-fold increase. Only about 4 percent of Americans with employer-sponsored insurance were on a consumer-directed health plan in 2005, compared to about 30 percent today. The vast majority of individuals who obtained insurance under the Affordable Care Act are on consumer-directed health plans.
Patients are reducing their spending overall, but not for low-value services in particular — and medical providers also often lack incentives to curb spending on these services, which are frequently ineffective.
The study focused on 26 common, low-value services from various sources, including the Choosing Wisely campaign, national guidelines, peer-reviewed literature and professional consensus. Launched in 2012 by the American Board of Internal Medicine Foundation to raise awareness about unnecessary services, the Choosing Wisely campaign has compiled recommendations from more than 70 medical professional and specialty societies identifying common and wasteful medical tests, treatments and procedures whose use should be questioned or avoided.
While spending on unnecessary services did not significantly change after a patient switched plans, the high-deductible plan did result in an average, annual $231 decrease on outpatient spending.