The most underreported health story of this past week was, in my view, one that came out of the RAND Corp., the Santa Monica think tank known for its thorough, leading edge research on health policy. Before the words “health policy” throw you into a snooze, dear reader, let’s look at what the study showed and its implications for how people will fare under the new health law.
RAND researchers, with funding from the Robert Wood Johnson Foundation and the California Healthcare Foundation, two groups with a big stake in health reform, looked at medical claims from 800,000 families between 2004 and 2005, a time when high-deductible policies were beginning to surface. What they found was predictable.
Families whose policies carried a deductible of $500 or more spent fourteen percent less on health care than those who had insurance with lower deductibles, said Amelia Haviland, a member of the research team: “In plans with deductibles of $1000 or more, there was a significant reduction in spending.” Even when employers put money into these high-deductible accounts, as some do, they saved money on health expenditures for their workers.
The reason: People were not going to doctors and hospitals as much, and they weren’t buying as many prescription drugs. In particular, researchers examined preventive care and found that people in high-deductible plans were receiving less than those with low-deductible insurance. But get this—most of the time preventive care was not subject to the high deductibles. In other words, a $200 mammogram would be covered in full, but women were not getting them. Children in the control group got more immunizations than kids whose parents had high-deductible insurance, and adults in the control group got significantly more cancer screenings. Researchers speculated that perhaps consumers did not understand their policies. Or if they weren’t going to the doctor, they weren’t getting referred for routine screenings.
Offering policies with deductibles of $1000, $2000, or more is fast becoming the cost containment measure of choice. People choose them because they have cheaper premiums and often can’t afford anything else. Asking patients to pay more on their own—making them have more skin in the game, as they say—is a way to reduce the nation’s health care tab without imposing tight controls on the docs and hospitals, which yell and scream whenever that threat shows up. The theory is that if you have to pay for your own care, you’ll think twice before running off to a doctor.
“There is a cost shift here,” Haviland explained. “What these plans are about is shifting costs. They are an effective tool for reducing spending, but there’s concern they could reduce necessary medical care in ways that could affect their future and the future of health-care spending.” Health reform was supposed to change all that. Remember all that talk about preventive care saving money so people wouldn’t have costly illness later on?
Given that, you might have expected the media to be all over the story, especially since high deductible plans will be offered through the state health insurance exchanges. Policies sold to employees of small groups can have deductibles as high as $2000 for individuals and $4000 for families; those offered to individuals will have no limits, although out-of-pocket spending will be limited in other ways. High-deductible policies are already common in the Massachusetts Connector, where deductibles can be as high as $2000 for individuals and $4000 for families.
Instead coverage was scarce, particularly in the MSM. Much of what there was appeared in the trade pubs such as American Medical News and Healthcare Leaders Media. “I’ve been surprised and a bit disappointed there wasn’t much uptake,” said RAND’s PR guy, Warren Robak. Was it that the news hole was too tiny with Libya, Japan, and Washington’s budget shenanigans hogging all the space? Or was it that reporters couldn’t immediately find an anecdote to stick in their stories? Or was it plain disinterest?
Kay Lazar, the Boston Globe’s health reporter, couldn’t find any anecdotes, but she knew a good story when she saw one, and she ran with it. Lazar interviewed Haviland—who, by the way is one researcher who speaks in plain English—and tailored her piece to Massachusetts, where only two percent of people with health insurance took a high deductible plan. Still, that number has nearly doubled —from about 50,000 people in 2009 to about 93,000 last year. Lazar said her story connected with the public; lots of people called to talk about their experiences with high-deductible plans. The issue was covered well in the state. The AP rewrote the Globe story; the Worcester Business Journal and WBUR also noted the study. WBUR, however, took the story one step further, as I’ll explain tomorrow—it showed how high deductible coverage affects real people.