Many economists agree that the increase in high deductibles is one reason for the historic slowdown in U.S. healthcare spending (other reasons are more hotly debated). Increasingly, households have insurance that requires patients to spend $1,000 or more before health plans offset the cost of medical care. As households seek less care to avoid the cost, the nation spends less on healthcare.
That frugality is not without cost, however, as numerous studies have shown, including a new working paper published by the National Bureau of Economic Testing, a nonpartisan research organization.
That's because patients are likely to forgo highly effective treatment to escape medical bills under high deductibles. The new study found use of preventive medicine dropped when one employer switched to high-deductible health benefits.
For patients, that can lead to poorer health and bigger medical bills in the future. For doctors, hospitals and policymakers, patients' decisions to go without care threaten to undermine efforts to slow U.S. health spending with initiatives and incentives to improve prevention and management of chronic disease and, ultimately, overall health. Medicare and commercial insurance increasingly reward doctors who can hold down the cost of care—but only when doctors meet targets for managing diabetes, heart disease and other quality measures. Some health plans penalize doctors who fail. But under high-deductible plans, the household expense for such medical care may be more than patients are able or willing to pay.
“It seems to make little sense to have the consumer benefit design make it very difficult for individuals to follow up with recommended treatment plans,” said Dr. A. Mark Fendrick, whose own patients have made similar choices. Fendrick is also director of the University of Michigan Center for Value-Based Insurance Design, which promotes health benefit plans that reduce patients' financial barriers to high-value care and increase out-of-pocket costs for low-value services. “I strongly support consumer engagement and consumer responsibility, but the simple fact of non-clinically nuanced high deductibles will lead consumers to forgo evidence-based health services that their very doctors are being benchmarked to provide,” he said.
The new study, by Peter Huckfeldt at the University of Minnesota and colleagues, looked at what happened to prescription drug spending to treat chronic conditions when employers introduced high-deductible health plans and discontinued more generous benefits. The study examined drugs to control hypertension and diabetes, conditions that can be costly, debilitating and potentially fatal when left unchecked.
One employer in the study did not exempt prescription drug spending from the $1,000 to $2,000 deductible. A second employer did.
Perhaps unsurprisingly, workers with high deductibles that did not exempt medications were more likely to switch to less costly generics. They were also more likely to time their drug refills to get the most of their coverage. (They stocked up on drugs when benefits kicked in, typically at the end of the year after household spending met the deductible.)
But mostly, they didn't fill their prescriptions.
Patients' out-of-pocket spending for the drugs dropped, the study shows, but more generic use was not the primary reason. About 90% of the drop in spending on statins was attributable to using less medication. For antihypertensive drugs, the figure was 93%. For diabetes drugs, 58%, the researchers estimated.
“This study adds confirmation to the simple adage: If you make people pay more for something, they will buy less of it, regardless of the clinical value,” Fendrick said.
As consumers, patients are at a disadvantage, Fendrick said. High deductibles confront patients with a choice between immediate savings and the perhaps less-well-understood consequences of forgoing medical care. “Purchasing healthcare services is far more complicated than more basic economic purchases for which we might trust individuals to make rational choices regarding their own money.”
Notably, the new study also found that even those workers with high deductibles that exempted medication were less likely to take medication as prescribed. That could indicate that patients avoided a trip to the doctor—which was subject to the deductible—which would have resulted in a prescription refill, Huckfeldt said.
The decision to forgo care may be because patients don't fully grasp the potential consequences, he said, or they are prioritizing the immediate cost of their medication over the potential risk their health might suffer later.
Either way, the savings to U.S. health spending may be short-lived.
“These are effective drugs,” said Huckfeldt, an associate professor of health policy at the University of Minnesota School of Public Health. “To the extent that reducing use of things like statins results in poorer control of high cholesterol, there could be a risk that in the longer term, people in these plans exhibit worse health outcomes and that might lead to higher health spending,” he said.
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