Health Insurance

Center for Practical Health Reform’s take on High Deductible Health Plans (HDHP)

On The Health Care Blog, Brian Klepper of the Center for Practical Health Reform weighs in on his opinion on HDHP (“Can Consumerism Save Healthcare?“).  A few of his major points:

  • Imperfect Information still a problem: HDHP’s force consumers to absorb a portion of the health care cost and thus these individuals should shop for providers based on quality and price.  Klepper states that while the internet is helpful in terms of patient self diagnosis,  “…so far, even though inexpensive evaluation tools exist, consumers still can’t get much information on the pricing and performance of hospitals, doctors and drugs. It’s hard to be an effective shopper if you don’t know what things cost or how the vendors stack up.”
  • Chronic and catastrophic illnesses fuel rising healthcare costs.  While HDHPs may lower healthcare costs somewhat, their impact may be small.  “In truth, patients’ diagnostic and treatment choices represent a tiny portion of larger healthcare cost. The real money is associated with chronic disease and catastrophes. In those cases, healthcare professionals, not patients, guide the purchasing decisions. “
  • Fee for Service: another driver of healthcare costs.  Fee for service compensation encourages physicians to prescribe too many services.  “The real roots of our healthcare crisis reside in the ways suppliers and clinicians are rewarded to deliver goods and services that are inappropriate, unnecessary and wasteful. Most healthcare experts agree that half or more of healthcare cost is due to these factors.”
  • Klepper’s bottom line: “When it’s more mature, healthcare consumerism will likely include the mechanisms that help patients become better buyers and impact cost. Until then, HSAs and HDHPs are less expensive, slimmed down, short-term solutions that can work well if you’re healthy or financially secure. But they’ll do little to address our rapidly collapsing healthcare system. And as a national solution, they’re inadequate and oversold.”