We haven’t reported on what is happening in the market for Consumer Driven Health in a while, so there is a lot to look at.

Blue Cross

We’ll start with a study by the Health Care Service Corporation (the Blue plans in Illinois, Texas, Oklahoma and New Mexico) on the experience of their customers with their CDH plan, known as BlueEdge. Enrollment in BlueEdge has passed 1.5 million people this year and this study tracks them from before they entered the Consumer-Directed plans, which include both HSAs and HRAs.

A press release reports that BlueEdge enrollees –

  • Were four percent more likely to use preventive services.
  • Reduced overall utilization by 12 percent.
  • Were 10 percent more likely to use generic medications.
  • Spent 24 percent less on inpatient and 8 percent less on outpatient services.
  • Reduced hospital ER care by 12 percent.

These are changes in behavior by the same people before and after they joined the BlueEdge program. Unfortunately, the study itself is not available to the public, but a summary on the company web site reports that the reductions grew over time, dropping by 9.1% in the first year, but by 11.4% over three years.

Western Michigan

An employer survey in West Michigan (Grand Rapids) reports that the percentage of employers offering HSA programs in that area grew by a third, from 30% in 2011 to 39% in 2012. The article quotes Bob Hughes of Advantage Benefits as saying, “(HSAs) will be the dominant plan down the road. It’s heading in that direction and nothing is going to stop it,”

M&T Bank

The Buffalo News reports that M&T Bank is doing a full replacement of its current PPO plans with an HSA program. It will offer its 15,000 employees a sliding scale HSA contribution based on salary.

Robert Wood Johnson Foundation

We have reported here before on an important study conducted by researchers at the Rand Corporation on CD Health. Now the funders of that study, the Robert Wood Johnson Foundation, has released its own report that highlights some additional information. The study authors write articles in several different publications and this report collects the key findings from the several articles, including that –

  • Only plans with deductibles of at least $1,000 resulted in significant savings, and savings decreased with generous (more than or equal to $500) employer contributions to health care accounts.
  • In almost all cases, the benefit designs of consumer-directed health plans affect lower-income populations and the chronically ill to the same extent as nonvulnerable populations. These effects include significant reductions in overall spending that increase with the level of the deductible. Greater reductions were found for high-deductible plans when paired with health savings accounts (employee- owned) in comparison to health reimbursement accounts (employer-owned).
  • However, enrollment in consumer-directed health plans does lead to reductions in preventive care that are considered beneficial for all groups (for example, recommended cancer screening), even though the deductible is waived for preventive care in most of the high-deductible plans. This may have greater health consequences for lower-income and chronically ill people than for others.
  • About two-thirds of the cost savings from enrollment in a consumer-directed health plan are from reductions in the number of episodes of care and the remaining one-third of the savings are from reductions in costs per episode.

Health Affairs

The Health Affairs blog picked up on this latest report in a post by Maribeth Shannon. She accepts that CDH plans are here to stay, but is concerned that consumers do not yet have enough information to use them wisely. She urges more attention be paid to helping consumers understand benefits, prices, and treatment options.


Mitch Daniels (my choice for HHS Secretary in a Romney administration) wrote an op-ed in Human Events in which he writes –

The central contention of a book I recently wrote is that our liberty depends on the personal responsibility and accountability of individual citizens. Unfortunately, many, especially those setting national policy today believe that Americans are too intimidated, gullible or dim-witted to make wise, informed decisions about the important issues affecting their lives, and need their benevolent betters in government to do it for them.

He counters this mind set with Indiana’s experience with Health Savings Accounts, which he calls “an unqualified success.” He cites both the HSAs available to Indiana state employees, which were chosen by 90% of eligible workers this year, and with “Healthy Indiana,” the program for low-income Hoosiers, which now enrolls 50,000 people.