Patients are leading a quiet yet impressive revolution in health care through consumer driven health plans (CDHPs).  For those that may be unfamiliar with these plans, CDHPs are newer types of health insurance plans that cover larger medical expenses and preventive care and are usually paired with a Health Savings Account (HSA) or Health Reimbursement Account (HRA) that can be used to pay for smaller and routine health care expenses.  Many companies are now offering HSAs and/or HRAs to their employees, and most insurance companies sell HSA policies to individuals who do not have access to insurance coverage through their job.  An estimated 15 million Americans are now covered by a CDHP with an HSA or HRA.

Empowering Patients to Make Decisions.  It may not seem plausible that each patient can affect much change on our health care system, but increasingly data is showing that when patients join together (albeit in a non-organized fashion), dramatic change results.  How is this possible?  Patients enrolled in CDHPs get more value out of the system by:

• Becoming better informed about their treatments;
• Paying closer attention to the cost of treatment — and trying to keep it as low as possible without compromising quality;
• Paying closer attention to the quality of care provided by the facility and/or the medical professional; and,
• Changing their behavior based on this information. 

In addition, most people know they should adopt healthier lifestyles and participate in wellness and prevention programs.  But until CDHPs became widely available, there was little financial reason to do so.  Patients were insulated from the cost of health care and so they were sheltered from the financial implications of their decisions.  And if they saved money by choosing lower-cost services, the savings would benefit the health plan or employer, not the patient.

Consumer driven plans positively engage patients by changing the economic incentives.  Patients now have a reason to ask questions, shop for price, and choose lower cost but equally effective services.  Once patients have control of their own money and are able to make their own choices, they suddenly become very interested in seeking out information about the cost and quality of health care services and alternatives.  They are more likely to listen to their doctor and look for ways to lower their own costs.  They are more likely to change their lifestyles because it is their money on the line.

Because they are spending their own money, patients weigh the costs versus the benefits and frequently choose lower-cost treatments.  One might not expect that patients would exercise much discretion when it comes to medical emergencies, but amazing things happen when their own money is at stake.  For example, a study in the Journal of the American Medical Association found that people enrolled in CDHPs have 10 percent fewer emergency room visits overall and 25 percent fewer repeat visits, almost entirely for non-severe conditions.  Regence Blue Shield found that people decreased their use of hospital emergency services by 32 percent when they switched from a traditional insurance plan to a CDHP.

Spreading the Savings.  As employees become more engaged in their health care, employers are also seeing dramatic changes, including not only lower premiums but lower rates of growth in their health benefit costs from year to year.  Premium savings vary depending on many factors, but adopting a CDHP generally saves companies 25 to 40 percent in the price of premiums.

Lower premiums are only half of the success story.  The Mercer Company found that the annual rate of increase for CDHPs was about half of that for PPOs and HMOs.  WellPoint looked at the experience of 8,000 of its group accounts in 2008, and found that PPO and HMO rates rose between seven percent and 10 percent from the previous year, while costs for its CDHPs actually dropped from 2007 to 2008.  Most of the major insurance carriers – including Aetna, Cigna, Humana, and United Healthcare -- have reported similar results, and the results continue even six years later.

Costs for CDHPs are falling because people are becoming more engaged in their own health — something policymakers have been trying to achieve without success for decades.  Patients enrolled in CDHP participate in wellness and prevention programs at higher rates than others, and they choose generic medications over name brands, avoid using hospital emergency rooms in favor of retail clinics or their own doctor, and comply better with recommended treatment programs.

An Imperfect World.  Critics of “consumerism” in health care frequently mention how hard it is to get information about the cost and quality of care before patients receive it.  And they have a point.  Unfortunately, “shopping” for health care is not as easy as most retail stores make it, but that too is changing.  While dental, vision, and cosmetic medical service professionals are used to offering transparent prices, “package pricing” and cash discounts, much of the medical profession cannot tell you how much they charge patients – insured or uninsured – for most of the medical care they provide.  Convenient care clinics in pharmacies, shopping malls and retail stores, with their easy to read and understand menu of services and prices, are making things easier.  Insurance carriers are also doing a better job of making internet-based tools available to their members so they can comparison shop.

Sadly, most patients have no idea how much health care really costs, or that the cost can vary ten-fold for the same procedure.  A recent article in the New York Times (Survey Finds High Fees Common in Medical Care, August 12, 2009) highlighted some of the dramatic differences between what some patients were charged and what Medicare pays for the same procedure.  Often, “shopping around” and being willing to travel a few more miles or seeking out the most experienced facility or medical professional can save patients thousands of dollars. 

It may also surprise people that the least expensive care is available from some of the highest quality facilities and medical professionals, often because of their experience.  Many patients wrongly confuse “high cost” with “high quality,” but in health care the opposite is frequently true.  CDHPs put patients in charge of making the decision that provides the best value for the money.