I am always struck by the difference between the salesmanship of health plans offering consumer-driven health products and the reality of the data.
James Robinson and Paul Ginsburg have an article in the January 27th edition of Health Affairs with an objective review of the consumer-driven movement of recent years.
Here is the central point of the article:
The performance of consumer-driven health care has fallen short of both the aspirations of its proponents and the fears of its critics. Growth of the favored organizational forms, including HDHPs and individually purchased insurance, has been anemic. The forms of insurance and sponsorship originally embodied in the consumer-driven vision have mutated into forms far from those originally envisaged. This process is not unique to consumerism, but one well known to managed care, where the original group-/staff-model HMO was diluted into the loosely structured independent practice association (IPA)-model plan and the sponsorship framework of managed competition into the “total replacement” purchasing format of self-insured employers.
They also point out that:
- Enrollment in HDHP/HSA plans grew from 400,000 in September 2004 to 6.1 million in January 2008–“a large absolute increase but still small in relation to overall enrollment in private insurance.” By comparison, HMOs continue to hold 20 percent of the employer market and POS plans 12 percent.
- “The consumer-driven health care movement has been obliged to dilute its principles in light of the overuse of inappropriate services and underuse of appropriate services in the real world. HDHPs now incorporate elements of disease management for enrollees with chronic conditions; case management for enrollees with complex or comorbid conditions; and utilization management for patients using particularly costly drugs, devices, or procedures. Most of these medical management programs are obtained from the same diversified insurers that offer HMO and PPO products. Indeed, the potential for integration with claims databases is leading insurers to acquire many formerly independent medical management vendors.”
- “The blind spot in the consumer-driven analysis of market performance concerns the importance of coordination in insurance, delivery, and sponsorship. The obdurate insistence on á la carte choice and retail purchasing pushed the theorists of consumerism into positing organizational and market dynamics that have not been observed in the real world.”
Consumer-driven principles have clearly impacted the design of mainstream health insurance plans for the better.
But consumer-driven principles have not changed the fundamental dynamics of our health insurance system nor have they turned out to be a silver-bullet solution.
In my mind, the fundamental fault with the logic that they would be was the belief that consumers could do what insurance companies, employer benefit managers, and even providers could not.
Robert Laszweski has been a fixture in Washington health policy circles for the better part of three decades. He currently serves as the president of Health Policy and Strategy Associates of Alexandria, Virginia. Before forming HPSA in 1992, Robert served as the COO, Group Markets, for the Liberty Mutual Insurance Company. You can read more of his thoughtful analysis of healthcare industry trends at Health Policy and Marketplace Blog, where this post first appeared.