CDHP Users Cost-Conscious but Price Shopping Limited

For many, lack of easily accessible price and quality benchmarks remains a hurdle

By Stephen Miller, CEBS January 14, 2016

Consumer-directed health plans (CDHPs) appear to be succeeding at getting people to discuss treatment costs with their doctors, but options remain limited for those with high-deductible health plans (HDHPs) who attempt to shop for the best prices among health care providers.

CDHPs are a combination of health coverage plans with high deductibles (at least $1,300 for individual coverage in 2016) and tax-preferred vehicles including health savings accounts (HSAs) or health reimbursement arrangements (HRAs) that workers can use to pay their out-of-pocket health care expenses (here's how HSAs and HRAs differ).

According to surey findings from the nonprofit Employee Benefit Research Institute (EBRI), released in December, adults enrolled in a CDHP were more likely than those in a traditional plan to:

Check whether the plan would cover care.

Ask for a generic drug instead of a brand name.

Talk to their doctors about prescription options and costs.

Ask a doctor to recommend a less costly drug.

Talk to their doctors about various treatment options and the related costs.

Develop a budget to manage health care expenses.

Use an online cost-tracking tool provided by the health plan.

CDHP enrollees also were more likely than traditional-plan enrollees to take advantage of wellness programs, such as health-risk assessments with biometric screenings, and fitness-promotion programs.

“Employers have been interested in bringing aspects of consumer engagement into health plans for many years, not just through greater cost-sharing but also through wellness programs,” said report author Paul Fronstin, director of EBRI’s health research and education program. “Consumer-driven health plans appear to be having that effect.”

People in a CDHP also were more likely than people with traditional coverage to say that they had talked to friends, family or colleagues about health plans; attended a meeting where health plan choices were explained; and consulted with their employer’s HR staff about health plan choices.

Price-Comparison Challenges

Separate research findings by the nonprofit National Bureau of Economic Research were gleaned from studying the behavior of people enrolled in an HDHP (whether or not linked to a tax-preferred account). While these consumers reduced their spending on health care services “including potentially valuable care (e.g., preventive services) and potentially wasteful care (e.g., imaging services)” that were likely to be unnecessary, the researchers found little evidence that HDHP enrollees were engaging in price shopping among health care providers.

“Employers have learned that the higher deductible can be a real deterrent for employees without enough savings to comfortably handle a major medical expense,” said Tracy Watts, Mercer’s national leader for health reform in Washington, D.C.

Lack of price and quality benchmarks for health providers has often been cited as a hurdle to effective comparison shopping. But that information is becoming easier to access. Preliminary findings from Mercer’s 2015 National Survey of Employer-Sponsored Health Plans show that more large employers are contracting with a specialty vendor to provide their employees with a transparency tool—an online resource to help them compare provider price and quality. Among employers with 20,000 or more employees, 24 percent provided transparency tools in 2015, up from just 15 percent the year before.

“When CDHPs were first introduced, the concept made intuitive sense, but we didn’t have the tools we have now to help employees actually become better health care consumers,” said Watts. “I think we’re finally turning the corner.”

But cautioned Larry Boress, president of the nonprofit Midwest Business Group on Health, based in Chicago, “Part of the issue for transparency tools—those offering information on the quality and cost of medical services—is that they differ widely. Some are self-service websites and apps, others are available by talking to a real person on the phone. Some use only government and plan data, and others use any source of information, regardless of its accuracy—such as using Yelp for physician quality/satisfaction ratings.”

Jennifer Benz, founder and CEO at Benz Communications in San Francisco, predicts a shift from a “consumer directed” to a “directed consumer” model, in which employees will be provided with access to personal guidance for health care shopping. That could mean “real progress and perhaps better financial results for individuals and companies,” she noted, adding, “employees want—and need—more guidance in their health care decisions.”

Supreme Court to Rule on State-Maintained Claims Databases

A case before the Supreme Court this term, Liberty Mutual v. Gobeille, will determine if states may collect payment and price information from the administrators of self-insured health plans, so as to include this data in state-run all-payer claims databases (APCDs) currently maintained by over a dozen states—or whether the Employee Retirement Income Security Act prevents individual states from doing so. APCDs, if they can collect information from all plans, both fully insured and self-funded, have the potential to significantly increase price transparency for health care services, say health policy experts who support this approach. (See the SHRM Online article Supreme Court Decision Could Lower Health Care Costs.)

Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow me on Twitter.


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