What's New with HCFO - November 18, 2005 (Print All Articles)

Health Savings Accounts Growing in Popularity

It's open enrollment season and more people than ever are being offered the chance to sign up for a Health Savings Account (HSA) in conjunction with a high deductible health plan. HSA advocates hope that giving consumers a financial stake in their health care decisions will incentivize them to choose higher quality, more efficient providers and will ultimately lower health care spending. Among firms offering health benefits in 2005, 2.3 percent offered HSAs.[i] Interest has risen dramatically for 2006. A survey by America's Health Insurance Plans indicates that 81 percent of large and 78 percent of small businesses were considering implementation of HSAs.[ii] Though actual numbers are not yet available, it is estimated that 27 percent of employers currently not offering HSA qualifying plans were likely to offer HSAs in 2006.[iii] Large corporations that have added HSAs include Wal-Mart, General Motors, and Chrysler.[iv] Uptake in the small business arena has also increased.[v] About 2 percent of companies are planning total replacement of their other health care plans with HSAs.[vi]

 

A growing number of workers are also participating in HSAs. Roughly 15 percent of workers offered HSAs take up this option.[vii] More than 1 million people in the group and non-group markets are now enrolled, doubling the amount from 2004.[viii] Estimates predict there may be as many as 15 million people using HSAs by 2010, accumulating between $10 and $62 billion in HSA assets.[ix][x]

 

The Robert Wood Johnson Foundation's HCFO initiative sponsored a candid discussion between HSA stakeholders which was highlighted in the June 2005 HCFO Issue Brief.[xi] During this discussion, key stakeholders focused on employee enrollment. Research has identified four factors that influence take-up: wages, premiums, health status, and education level. These findings raise questions about adverse selection, decision-making ability, and usefulness as a savings tool. 

 

One goal of consumer-directed plans like HSAs is that costs are reduced over time as consumerism increases among beneficiaries. Yet, many critics are concerned that HSAs will simply shift costs onto consumers. Findings from the Kaiser Employer Health Benefit 2005 Annual Survey reveal evidence to support both scenarios. HSA premiums in 2005 were significantly lower than other types of plans, though the average worker contribution remained the same for individuals but decreased for families. Employer contributions to accounts averaged $553 for individuals and $1,185 for families, covering a fraction of the average deductibles of $1,901 and $4,070, respectively. Of workers enrolled in HSAs, 35 percent did not receive any employer contributions to their accounts. HSA rules will change when cost of living adjustments are made.[xii] For 2006, the Treasury Department and IRS have raised the maximum allowable annual contributions, out-of-pocket maximums and minimum deductible amounts.[xiii] 

 

In addition to the HCFO meeting on Health Savings Accounts and the resulting Issue Brief, several HCFO projects are investigating the impact consumer-directed care and HSAs will have on consumers and the health care market. Stephen Parente, Ph.D., at the University of Minnesota examined the experience of early adopters into consumer-driven health plans (CDHP) from both the employer and the employee perspective. This project evaluated differences in self-selection, cost, utilization, and satisfaction with Definity Health, a CDHP compared to other plans. Parente found that enrollees in the CDHP had lower total expenditures than PPO enrollees but higher costs than the HMO group. The CDHP enrollees had fewer physician visits and lower drug costs but higher hospital costs and admission rates than people in other plans.[xiv] Employees who chose Definity appeared to be neither younger nor healthier than those who chose other plans, but they were wealthier.[xv] Satisfaction with CDHPs was rated highly by almost half of the enrollees, no different than with other health plans.[xvi] Parente was awarded a second HCFO grant to expand this work and study the long-term impact of different CDHP designs, including HSAs, on quality of care, cost, utilization, and variation in these outcomes. Parente and colleagues predict that 3.2 million people could enroll in HSAs and that the number of uninsured could be reduced by 2.9 million if the Bush administration's refundable tax-credit proposal were implemented.[xvii] 

 

Another HCFO grantee, Judith Hibbard, Dr.P.H., at the University of Oregon is testing the validity of assumptions underlying CDHPs by studying the Definity Health Plan and a large employer. The key assumption tested is whether consumers will take charge of their health and health care and make cost-effective choices if they are given financial incentives and information to support their choices. Hibbard has published preliminary results that show patients become “activated” to participate in health care decisions in four stages: 1) believing the patient role is important; 2) having the confidence and knowledge necessary to take action; 3) actually taking action to maintain and improve one's health; and 4) staying the course even under stress.[xviii]

 

HCFO grantees, Arnold Milstein, M.D, of Mercer Human Resource Consulting and Meredith Rosenthal, Ph.D., at the Harvard School of Public Health examined the prevalence and the typical benefit structure of CDHPs in the market. They also assessed the effects of CDHP products on cost and quality. Findings showed limited support for informed decisions in these plans. They argue that decision-support should be improved if CDHPs are to succeed in optimizing consumer's utility from health benefit spending.[xix] The researchers evaluated the ability of 14 CDHP designs to curb spending growth. Early adopters reported favorable cost savings and service substitution rather than reductions in use. Three weaknesses identified in this study included inadequate financial incentives, no cost-sharing adjustments to preserve freedom of choice for low-income consumers and inadequate cost and quality information to permit informed choices.[xx] Rosenthal argues that new benefit models like HSAs, which include doughnut-shaped insurance coverage with large deductibles, present considerable risk to enrollees given the skewed distribution of health care spending and the placement of the typical deductible.[xxi]

 

HCFO Funded Research:

 

Title: Evaluation of Defined Contribution Plans on Health Insurance Choice and Medical Care Use

Institution: University of Minnesota

Time: November 2002 – January 2005

Principal Investigator: Stephen T. Parente, Ph.D.

 

What is the service use and adverse selection of consumers who select a CDHP and what is the experience of “early adopters” from the employer and employee perspective? The researchers are conducting a two-part evaluation of Definity Health, a consumer-driven plan.  The following research questions comprise the framework of the evaluation: 1) Who chooses to join CDHPs? 2) Do these plans attract the healthier employees in an employer's health insurance risk pool? 3) How do cost and use differ among people in CDHPs versus other plans? 4) Do patterns of service use and medical care change for enrollees in CDHPs after enrollment? 5) How do employees and employers assess their experience in the plan? The objective of the study is to provide private and public decision-makers unbiased information on the effects of CDHPs in their early stages.

 

Publications:

 

Parente, S. et al. “Employee Choice of Consumer-Driven Health Insurance in a Multiplan, Multiproduct Setting,” Health Services Research, Vol. 39, No. 4, Part 2, August 2004, pp. 1091-112.

 

Parente, S. et al. “Evaluation of the Effect of a Consumer-Driven Health Plan on Medical Care Expenditures and Utilization,” Health Services Research, Vol. 39, No. 4, Part 2, August 2004, pp. 1189-210.

 

Christianson, J. et al. “Consumer Experiences in a Consumer-Driven Health Plan,” Health Services Research, Vol. 39, No. 4, Part 2, August 2004, pp. 1123-40.

 

Christianson, J. et al. “Defined-Contribution Health Insurance Products: Development and Prospects,” Health Affairs, Vol. 21, No. 1, January/February 2002, pp. 49-64.

 

Feldman, R. et al. “Consumer-Driven Health Plans: Early Results from a National Study,” Division of Health Services and Research-Research Brief, September 2004.

 

Developed a website to disseminate research. See http://www.ehealthplan.org/.

 

Click here for further information on this grant.

 

Title: The Impact of Multiple Consumer Driven Health Plans Beyond Early Adoption: Here to Stay or Market Fad?

Institution: Regents of the University of Minnesota

Time: December 2004 – November 2007

Principle Investigator: Stephen M. Parente, Ph.D.

 

How will CDHPs impact quality of care, cost, and utilization of health care in the long-term? Will the impacts vary by CDHP design? Researchers from the University of Minnesota are exploring the long-term impact of CDHPs, specifically their impact on quality of care, cost, utilization, and variation in these outcomes by different CDHP designs, including HSAs. Building on their current HCFO grant, the researchers are examining claims and employer data from the six employers included in their ongoing study (offering Definity Health) and six new employers using CDHPs from Destiny Health, Blue Cross Blue Shield and UnitedHealth Group. They are examining four research questions: (1) what is the long-term effect of CDHPs on health care cost and use; (2) are other CDHPs, including newly legislated HSAs, producing different results than Definity Health's CDHP; (3) what is the quality of care for CDHP enrollees with chronic illnesses such as diabetes and heart disease; and (4) how do consumers manage their CDHP spending accounts in the long run and can this knowledge be used to design an "ideal" CDHP? The objective of this study is to provide objective empirical analyses of the impacts of CDHPs and newly developing HSA products on consumers.

 

Publications:

 

Feldman, R. et al. “Health Savings Accounts: Early Estimates of National Take Up from the 2003 Medicare Modernization Act and Future Policy Proposals: The Impact of Health Savings Accounts on Insurance and Coverage Costs,” Health Affairs, Vol. 24, No. 6, November/December 2005, pp.1582-91.

 

Click here for further information on this grant.

 

Title: How Valid Are the Assumptions Underlying Consumer-Driven Health Plans?

Institution: University of Oregon

Time: May 2004 – April 2007

Principal Investigator: Judith Hibbard, Ph.D.

 

How valid are the assumptions underlying CDHPs? The researchers propose to use both qualitative and quantitative methods to examine the key assumption underlying consumer driven health plans: if consumers are given financial incentives, choices and information to support these choices, they will take charge of their health and health care and make prudent choices. Working with Definity Health Plan and a large employer (which offers their employees a choice of Definity and a PPO option), the researchers are following one cohort of employees who enroll in Definity and another cohort who enroll in a PPO plan. The objective of the study is to compare the knowledge, use of information, satisfaction with care, cost-effective utilization, and cost of care for persons enrolled in Definity and the PPO over time.

 

Publications:

Hibbard, J. et al. “Development of the Patient Activation Measure (PAM): Conceptualizing and Measuring Activation in Patients and Consumers,” Health Services Research, Vol. 39, No. 4, August 2004, pp.

 

Click here for further information on this grant.

 

Title:  An Early Portrait of Consumer-Directed Health Benefits: Design, Integration, Penetration, and Effects

Institution: Harvard School of Public Health

Time: May 2003 - December 2003

Principal Investigator: Arnold Milstein, M.D.

 

What is the prevalence of consumer driven health benefits (CDHBs) in the market and what is the early evidence about how the movement toward CDHBs has affected cost and quality? The analyses included three categories of CDHBs: health retirement accounts, tiered or flexible benefit design products, and tiered network or treatment option models.  Specifically, the researchers 1) assessed the enrollment in and features of different types of CDHBs, 2) assessed the effects of these newly-introduced products, 3) generated hypotheses about the longer term prospects and impact of CDHBs, and 4) derived policy recommendations aimed at maximizing the value of CDHBs. This study provides purchasers and other private and public decision makers with early information about what CDHB plans are and how they affect cost and quality.

 

Publications:

 

Rosenthal, M. and A. Milstein. “Awakening Consumer Stewardship of Health Benefits: Prevalence and Differentiation of New Health Plan Models,” Health Services Research, Vol. 39, No. 4, Part 2, August 2004, pp. 1055-70.

 

Rosenthal, M. “Doughnut Hole Economics,” Health Affairs, Vol. 23, No. 6, November/December 2004, pp. 129-35.

 

Rosenthal, M. and Milstein, A. "Awakening Consumer Stewardship of Health Benefits: Prevalence and Differentiation of New Health Plan Models," Health Services Research, Vol. 39, No. 4, Part 2, August 2004, pg. 1055-70.

 

Click here for further information on this grant.


[i] Kaiser Family Foundation and Health Research and Educational Trust. “Employer Health Benefit 2005 Annual Survey,” September 2005.

[ii] Yoo, H. and T. Chovan. “Number of HSA Plans Exceed One Million in March 2005,” Center for Policy and Research, America's Health Insurance Plans, May 2005.

[iii] Kaiser Family Foundation and Health Research and Educational Trust, September 2005.

[iv] Darlin, D. “No-Brainer Health Care is Passe,” The New York Times, October 29, 2005.

[v] Kaiser Family Foundation and Health Research and Educational Trust, September 2005.

[vi] “Number of Employers Offering Health Savings Accounts Will More than Quadruple in 2006, According to Mellon Survey,” PR Newswire US, May 19, 2005.

[vii] Kaiser Family Foundation and Health Research and Educational Trust, September 2005.

[viii] Yoo, H. and T. Chovan, May 2005.

[ix] Mogel, G. “HSAs May be Good for Banks, Bad for Insurers; Substantial Growth in Accounts Expected,” Investment News, October 3, 2005.

[x] Pasha, S. “More Health Savings Accounts Offered,” CNNMoney, October 13, 2005.

[xi] “Health Savings Accounts as a Tool for Market Change,” Changes in Health Care Financing and Organization Issue Brief, AcademyHealth, June 2005.

[xii] Kaiser Family Foundation and Health Research and Educational Trust, September 2005.

[xiii] Wojcik, J. “Maximum HSA Contributions Increased,” Business Insurance, October 31, 2005.

[xiv] Parente, S. et al. “Evaluation of the Effect of a Consumer-Driven Health Plan on Medical Care Expenditures and Utilization,” Health Services Research, Vol. 39, No. 4, Part 2, August 2004, pp. 1189-210.

[xv] Parente, S. et al. “Employee Choice of Consumer-Driven Health Insurance in a Multiplan, Multiproduct Setting,” Health Services Research, Vol. 39, No. 4, Part 2, August 2004. pp. 1091-112.

[xvi] Christianson, J. et al. “Consumer Experiences in a Consumer-Driven Health Plan,” Health Services Research, Vol. 39, No. 4, Part 2, pp. 1123-40.

[xvii] Feldman, R. et al. “Health Savings Accounts: Early Estimates of National Take-Up from the 2003 Medicare Modernization Act and Future Policy Proposals: The Impact of Health Savings Accounts on Insurance and Coverage Costs,” Health Affairs, Vol. 24, No. 6, November/December 2005. pp. 1582-91.

[xviii] Hibbard, J., et al. “Development of the Patient Activation Measure (PAM): Conceptualizing and Measuring Activation in Patients and Consumers,” Health Services Research, Vol. 39, No. 4, Part 1, August 2004, pp. 1005-26.

[xix] Rosenthal, M. and Milstein, A. "Awakening Consumer Stewardship of Health Benefits: Prevalence and Differentiation of New Health Plan Models," Health Services Research, Vol. 39, Iss. 4, Part 2, August 2004, pp. 1055-70.

[xx] Rosenthal, M. et al. "A Report Card on the Freshman Class of Consumer-Directed Health Plans," Health Affairs, Vol. 24, Iss. 6, November/December 2005, pp. 1592-1600. 

[xxi] Rosenthal, M. “Doughnut Hole Economics,” Health Affairs, Vol. 23, Iss. 6, November/December 2004, pp. 129-35.

      

Grantee Spotlight: Kathleen Thiede Call, Ph.D.

Kathleen Thiede Call, Ph.D. serves as associate professor at the University of Minnesota’s Division of Health Services Research Policy and Administration. Her research focuses primarily on access to care and health status among vulnerable populations. She has conducted several statewide surveys of Minnesotans, documenting characteristics of people with different kinds of insurance contracts and barriers to insurance coverage among the young, the low-income and minorities. She has developed a stream of research concerning the complexities of measuring and estimating rates of insurance coverage. She is co-principal investigator on the State Health Access Data Assistance Center (SHADAC), funded by The Robert Wood Johnson Foundation, which assists states in monitoring rates of coverage and using data to improve access.

 

Dr. Call received her Ph.D. in sociology from the University of Minnesota, where she also completed an NIA-funded post-doctoral fellowship in the Behavioral Neuroscience of Aging. Dr. Call has completed research in a wide range of areas, including biased selection in Medicare risk HMOs and potential barriers to expansion of Medicare risk HMOs in rural markets, burden among caregivers of elderly Medicare beneficiaries, adolescent development and participatory research exploring disparities in accessing preventive care.

 

In December 2003, HCFO awarded Call a grant to examine the Medicaid undercount and its implications for estimating rates of health insurance coverage.  Research indicates that general population surveys of health insurance coverage may undercount the number of individuals enrolled in Medicaid by as much as 15 to 50 percent, depending on the survey source. The assumption is that administrative counts are the gold standard, whereas survey estimates are flawed. Reasons put forward to explain the undercount: Medicaid enrollees are not adequately covered in survey samples, or they do not participate in surveys, or when they do participate they misreport their coverage and instead report they are uninsured. Following from the suspicion that the Medicaid undercount leads to an overcount in the number of insured, some analysts reassign survey respondents who appear to be Medicaid eligible from uninsured to Medicaid as to match the count of enrollees indicated in the program’s administrative files. This results in a lower survey count of the uninsured. Call and colleagues previously conducted a study that demonstrated that Minnesota Medicaid enrollees generally knew they were insured and whether their insurance was public or private. However, the same enrollees were uncertain as to which public program they were enrolled. Call and colleagues found no significant bias in estimates of uninsurance. These findings have significant implications for adjustments made to surveys to account for the Medicaid undercount.

 

Call and colleagues are replicating their Minnesota study in three other states:  Florida, California and Pennsylvania; with preliminary findings are consistent with the earlier Minnesota study. Call believes that her research on the discrepancy between survey and administrative records is necessary to enhance the usefulness of survey data and inform policymakers regarding the extent to which these programs are reaching their target populations. “This discrepancy between surveys and administrative data often leads to confusion and mistrust of survey estimates. These two sources of data are collected for very different purposes, serve very important and complementary needs, and both have strengths and weakness that need to be understood. The good news is that the three replication studies consistently indicate little bias in survey estimates of uninsurance resulting from the Medicaid undercount,” says Call. 

 

For more information on Kathleen Thiede Call and a list of selected publications, see http://www.hsr.umn.edu/People/regular/call/kcall.htm.

Spotlight on Grantee Publication

Jack Zwanziger, Ph.D., at the University of Illinois at Chicago, working with Principal Investigator Joel C. Cantor, Sc.D., from Rutgers University, is the co-author of an article that appears in the Spring 2005 issue of Inquiry, titled “Has Competition Lowered Hospital Prices?” The article details HCFO-sponsored research, which examined hospital deregulation in New York and the effect of competition and consolidation on hospital prices.

Current HCFO grantee publications and recent grant findings will be regularly featured in the results section of our Web site. 

 

Upcoming AcademyHealth Events

AcademyHealth Conferences and Seminars

 

 

NATIONAL HEALTH POLICY CONFERENCE

February 6-7, 2006 - Renaissance Washington, DC Hotel

http://www.academyhealth.org/nhpc/index.htm

 

Sponsored by AcademyHealth and Health Affairs, the National Health Policy Conference features leading experts from the Administration, Congress, academia, and the health care industry share their insights on critical health care issues confronting policymakers. Confirmed plenary speakers include noted health economist Uwe Reinhardt, who will take a provocative look at health savings accounts, and polling expert Bob Blendon, who will share his latest research on public opinion and health policy. Among the other topics to be addressed are: rebuilding the Gulf Coast health care system, reducing disparities in health care, patient safety, private sector perspective on responsibility for America's health care, preventing and managing chronic conditions in children, pay for performance, and MMA implementation.

 

Who should attend:

Federal and state policymakers, policy researchers and analysts, health industry executives, clinical decision makers, research funders, and health services researchers.

 

Register by December 30 to receive the reduced early registration rate.

 

NHPC Minicourses: Health Policy Tools and Techniques

February 8, 2006 - Renaissance Washington, DC Hotel

 

Interested in using research for decision-making in health care? Attend the NHPC minicourses to learn the necessary tools and techniques. Held in conjunction with the 2006 National Health Policy Conference, these three-hour courses give participants skills to improve health policymaking. 

  • Program Evaluation for Non-researchers
    An overview of the basic concepts and models of program evaluation with case studies to demonstrate their application.
  • How to Communicate with Decision Makers: Using Technical Information to Inform Health Policy
    A review of essential communication skills such as crafting a message, knowing the audience, and creating a successful strategy, as well as more advanced techniques such as conveying research results to policymakers.

 Visit http://www.academyhealth.org/nhpc/minicourses/index.htm to register.

  

Health in Foreign Policy Forum: Migration and the Global Shortage of Health Care Professionals

February 8, 2006 - Renaissance Washington, DC Hotel

 

The 2006 Forum will focus on an issue that literally crosses national boarders: the migration of health professionals, examining the causes, consequences, and possible domestic and foreign policy responses to the global shortage of nurses and physicians.

 

Visit http://www.academyhealth.org/nhpc/foreignpolicy/index.htm to register.

 

Building Bridges: Making a Difference in Long-Term Care 2006 Policy Seminar

February 8, 2006 - Embassy Suites, Washington D.C. Convention Center

 

This seminar, sponsored by the Commonwealth Fund under its Building Bridges: Making a Difference in Long-Term Care initiative, will address long-term care issues of interest to state and federal policymakers. The seminar will feature highlights from Randall Brown's background paper on consumer-directed long-term care. He will focus primarily on issues of interest to state and federal policymakers.

 

Visit http://www.academyhealth.org/ltc/2006/index.htm for more information and to register.

 

PUBLIC HEALTH SYSTEM RESEARCH AUDIOCONFERENCE 

In the wake of the recent Gulf Coast hurricanes, there is no better time than now to strengthen the U.S. public health system. With support from The Robert Wood Johnson Foundation, AcademyHealth is hosting two, 90-minute interactive audioconferences to highlight the accreditation of public health agencies and the creation of an evidence-base for the nation's public health system. For more information or to register, visit http://www.academyhealth.org/phsr .

 

  • Accreditation of Public Health Agencies: Lessons from Three States
    December 7, 2005 - 2:00 p.m. ET
    This audioconference will focus on lessons learned from North Carolina, Ohio, and Washington-three states that have implemented accreditation programs.
  • The Guide to Community Preventive Services: Developing an Evidence Base for Public Health
    January 11, 2006 - 2:00 p.m. ET
    Leaders of the Task Force on Community Preventive Services will discuss their experiences in setting the stage for evidence-based public health through The Guide to Community Preventive Services and the lessons learned in applying evidence-based recommended policies and practices in public health and health care settings.

2006 ANNUAL RESEARCH MEETING (ARM)

June 25-27 * Washington State Convention & Trade Center * Seattle

http://www.academyhealth.org/arm

 

Submit to the Call for Abstracts

Deadline: January 13

Nearly half of the program will be formed through the call for abstracts so be sure to include your research in the abstract submissions.

http://www.academyhealth.org/arm/abstracts/

 

Interested in hosting a meeting at the ARM?

The ARM provides an ideal opportunity for you to reach health services researchers, policymakers and practitioners who are attending the ARM. Meeting space is provided on a first-come, first-serve basis. To reserve space, visit http://www.academyhealth.org/arm/adjunct/

 

Join us in Seattle

Make plans now to enjoy Seattle and the beautiful Northwest in late June.

http://www.seeseattle.org/