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Time for a change

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In addition to being a true industry champion, my friend and mentor Bill Wetzel had a great facility for tweaking clichés and old sayings so they made perfect sense. I thought about Bill and some of his bon mots while doing research about the current state of health savings accounts (HSAs). He used to say, “David, when one door closes, another door opens. It’s the damned hallways that kill you!”

Looking at two recent studies, the question that comes to mind is whether HSAs are in the hallway or walking through the door. These studies on HSAs and resultant participant behaviors are instructive both with regard to those plan designs and in the broader context of increasing personal responsibility on traditionally-designed plans. First, America’s Health Insurance Plans (AHIP) issued its annual look at the market. They found a 22 percent increase in enrollment in HSAs in 2015 over 2014. The largest driver of that change came from large group plans. While the male/ female distribution is roughly even, it is notable that most enrollees (56 percent) are over age 40.

See also: A tale of two visits

HSA design uses a modified carrot-and-stick approach. Consumers can save money on a tax-advantaged basis (the carrot) but have to personally pay a large amount of their health care bills up front (the stick) before the plan kicks in. In theory, this initiates the behavior that in my house was known as “yours or mine.” Two daughters, each spending her own money, would shop much more carefully for new jeans than if they were shopping using dear old dad’s credit card. Ultimately, pants would be purchased and less money would be spent.

It worked with the children, but one recent study questions whether the same effect actually occurs with HSA participants or whether some other, more damaging behavior is taking place. The second study, by the Kaiser Family Foundation (KFF) recounts the design theory but concludes that it was just that … a theory. According to the results of their large-scale study, the theory might have been wrong. They looked at tens of thousands of workers enrolled in HDHPs to see how (or if) their patterns of care changed. Did they use new shopping tools at their disposal to compare prices before encountering expenses charged to their deductible?

If their findings are borne out, not only did these consumers ignore the shopping tools, they exhibited a behavior that is far more damaging in the long term: Both healthy and sick patients used much less health care. “I am a little bit surprised at just how poorly patients were able to do when looking at very similar products, like MRI scans, and with a shopping tool, “ says Jonathan Kolstad, an economist at the University of California Berkeley and one of the study’s co-authors. “Two years in [with this cohort], and there is still no evidence they are price shopping.” If this is true, the design is not yielding better consumers, it is producing sicker enrollees. The entire study is available at KFF’s website and it offers a great deal more detail supporting their conclusion.

The real question, it seems, is the one we posed earlier on. Are these plans and the behaviors they sought to bring about stuck in the hallway forever, or are they finding the “new door?” Opponents of this type of consumer-directed plan design point to studies such as KFF’s as proof of the former. That conclusion may be a bit premature, however.

See also: Power to the patients!

Dee Hock (founder and CEO of Visa) says that, “The problem is never how to get new, innovative thoughts into your mind, but how to get the old ones out.” Whatever the motivation, we are trying to change more than a half-century of habits, and that does not happen overnight. Getting plan participants to think like true consumers is going to be a long process. The first time you attempt the impossible it takes slightly longer.