Saturday, July 15, 2006


UHC's CDHP Study

On July 12th, United Healthcare released a summary of a recent study on the longterm trends of Consumer Directed Health Plans. Advocates of consumerism and HSA's will undoubtedly point to the release as proof that consumerism works. Considering their recent less than saintly behavior and the fact that their release includes no supporting data, I think some skepticism is warranted. That being said, the study was fairly large (50,000 participants) and spanned 3 years - certainly one of the largest studies to date. Keeping in mind that we only have a press release of the summary, here are some of the notable findings:
Preventive Care – In each of the three years, up to 5 percent more of the CDHP members sought preventive care services than did PPO enrollees.
This tidbit on preventative care is encouraging. If consumerism is to have any future, maintaing and in fact improving usage of preventative care is critical. Without such an increase, decreases in claims will be shortlived and will be followed by larger long term increases.
Acute Care – Individuals enrolled in a CDHP showed an annual reduction in the use of acute care services (22 percent fewer hospital admissions and 14 percent fewer emergency room visits) without adverse health effects or outcomes, while the relative utilization of those services actually increased year-over-year among PPO members.
ER benefits are typically overused in traditional HMO's and PPO's. A decrease in ER usage is expected and welcomed. However, to conclude that there are no "adverse health effects" depends completely on one's definition of "adverse health effects." Until such definitions and the data of the study are released, this conclusion might be a bit too good to be true.
Chronically Ill – CDHP enrollees with a chronic illness also used acute services less (8 percent fewer hospital admissions and 12 percent fewer emergency room visits) but continued to visit their primary care physician at the same rate as chronically ill members enrolled in traditional plans.
Notice that for Chronically Ill patients they do not conclude there were no "adverse health effects." Instead they prop their findinds up by comparing PCP utilization under a CDHP versus traditional plans. I call shenanigans.
Overall Costs – Costs per member decreased 3 percent to 5 percent in the CDH plan over the 2004-2005 period, as compared to their 2003 baseline level, while increasing 8 percent to 10 percent among PPO participants (after adjusting for demographics, health status, plan design impact and geography).
Encouraging numbers. It's all about the fine print though: "after adjusting for demographics, health status, plan design impact and geography." I could see a need for adjustments based on geography as costs can widely vary based on the locale. The meaning of adjustments based on "health status" and "plan design impact" is a bit less clear. What does "health status" mean in the context of this study? And why would adjustments for "plan design impact" even be necessary when the whole point of the study is to measure the impact of different plan designs?

Overall there are some critical questions that need to be answered regarding this study. Until UHC releases the information for public review, the study's conclusions, while encouraging for consumerism, need to be taken with a grain of salt.


And we're off!

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