Effects of Health Savings Account Eligible Plans on Utilization and Expenditures | Page 2

The health savings account-eligible design may decrease costs and utilization, but it also may decrease use of preventive services.

Published Online: January 29, 2011
Mary E. Charlton, PhD; Barcey T. Levy, PhD, MD; Robin R. High, MBA, MA; John E. Schneider, PhD; and John M. Brooks, PhD
McNemar’s tests compared the use of preventive services of eligible individuals within each group before and after January 1, 2005. Individuals were considered eligible for a preventive service if they met specific age and sex criteria Changes in use of preventive services between groups of eligible members were compared using stratified logistic  regression with a dichotomous outcome (used service/did not use service), controlling for age and prospective risk. Individuals were considered to have used the preventive service if they had 1 or more claims for the service during the time period.


A total of 696 individuals in the HSA-eligible group were distribution matched to 2778 individuals in the traditional group at a ratio of 1:4. The HSA-eligible group was significantly younger at baseline (29.9 vs 33.2 years; P <.05) but had equivalent average prospective risk scores of 0.853 due to distribution matching procedures. The proportion of males and females did not differ between HSA-eligible groups (55.5% male) and traditional groups (58.1% male). There also was no difference in the percentage of single versus family contracts between the HSA-eligible groups (52% single) and traditional groups (54% single).

Expenditure and Utilization Measures

Summary statistics for per member per year (PMPY) expenditures are displayed in Table 1. In general, the traditional group experienced yearly median increases in most expenditure categories from 2003 to 2006, whereas the HSA-eligible group generally experienced decreasing expenditures following implementation of the HSA-eligible design in 2005. In all categories except for inpatient and outpatient expenditures (in which the median remained at zero throughout the study period for both groups), the median expenditures of the traditional group in 2006 exceeded those in 2003. Conversely, the 2006 median expenditures of the HSA-eligible group were lower than the 2003 expenditures.

Average utilization totals by time period are expressed PMPY or as the rate per 1000 members (Table 1). Although median values varied minimally, mean utilization generally increased over time for the traditional group, with the exception of ED visits. In contrast, mean utilization in the HSA-eligible group generally decreased or remained unchanged following implementation of the HSA-eligible design in 2005, with the exception of outpatient visits and prescription fills.

Table 2 shows the impact of the HSA-eligible design on expenditures. After controlling for age and prospective risk, the positive versus zero expenditure models yielded negative   estimates, indicating that the HSA-eligible design implementation was associated with a lower likelihood of positive expenditures in the following categories: total, office, outpatient, pharmacy, and amount per drug. The Expenditure Models on Positive Values Only columns contain coefficients for the effect of HSA on positive expenditure measures, where  individuals with zero expenditure were excluded. The estimates are the log percent differences between study groups. In these models based only on positive values, the implementation of the HSA-eligible design was associated with significantly lower total expenditures (-17.4%), office expenditures (-20.3%), pharmacy expenditures (-29.2%), and amount per drug (-27.9%), and significantly higher outpatient expenditures (5.1%) than the traditional group. Inpatient expenditure was not significantly different between groups. A total of 24 distinct people (0.7% of total sample) were excluded from at least 1 expenditure model.

The utilization model coefficients are displayed in Table 3. These estimates are interpreted as the log percent difference between the traditional group and the HSA-eligible group. The implementation of the HSA-eligible design was associated with significantly fewer office visits (-13.6%) and ED visits (-20.1%). No other significant differences were detected, but measures such as inpatient and outpatient facility visits were used at substantially lower frequencies than measures such as office visits and prescription. A total of 16 people  (0.5% of total sample) were excluded from at least 1 expenditure model.

Use of Preventive Services

Table 4 shows the number of individuals meeting age and sex eligibility criteria for each preventive service. This table also illustrates the percentage of eligible individuals who used each service at least once from January 1, 2003, through December 31, 2004, and from January 1, 2005, through December 31, 2006, as well as the change in percentage of eligible individuals receiving preventive services before 2005 and after 2005. McNemar’s tests showed that the proportion of HSA-eligible group members receiving mammograms significantly decreased (-14%, P <0.05) after 2005. In contrast, the traditional group had a significant increase in prostate screening exams after 2005 (8.9%, P <.05).

Stratified logistic regression models demonstrated that the HSA-eligible plan was associated with significantly lower odds of receiving mammograms, and nearly significantly lower  odds of receiving Papanicolaou tests and routine health maintenance exams compared with the traditional plans after controlling for age and prospective risk (Table 4). There was no difference between the 2 groups in changes in use for prostate cancer screening.


In our analysis, the HSA-eligible plan was associated with significantly lower total expenditures, fewer and less costly office visits, fewer ED visits, less costly prescription fills and amount per drug, and a reduction in the likelihood of mammograms, Papanicolaou tests, and possibly routine physical exams. There was no difference in inpatient facility cost or utilization, but there was a significant increase in outpatient facility expenditures for those in the HSA group. These findingssuggest that members of the HSA-eligible group  restrictedutilization of nonemergent face-to-face services, including some preventive services, due to increased out-of-pocket office expenses. Pharmacy expenditures decreased significantly without a significant decrease in prescription fills, indicating that individuals with the HSA-eligible plan did not discontinue their prescriptions, but rather sought out lower-cost options such as generic medications to reduce out-of-pocket pharmacy expenses. The significant increase in outpatient facility expenditures, given no change in outpatient utilization and decreased ED utilization, indicated that once individuals with the HSA-eligible plan did seek services in an outpatient facility, the expenses related to those services were substantial. However, this phenomenon was not observed for inpatient services. Of note, outpatient and inpatient facility analyses were based on small utilization numbers and widely varying expenditures.

Our results are consistent with the RAND Health Insurance Experiment, which indicated that members consumed fewer services when faced with higher cost sharing.15 However, the RAND experiment found significant decreases in cost and utilization in all places and types of services, whereas our results showed that office, preventive, and pharmacy  services may have been more heavily impacted than hospitalrelated services. This difference may be related in part to the differences in the benefit designs studied. The RAND designs involved straight coinsurance, but the plans in our study involved a combination of coinsurance, copayments, deductibles, and OPM amounts.

Our results also are somewhat consistent with those of Parente et al, who compared the cost and utilization patterns of employees with employer-sponsored health coverage who were given a choice between traditional managed care plans and a CDHP (the latter involving a spending account rather than an HSA).4 Compared with traditional plans, the CDHP had lower costs associated with physician visits and pharmaceutical use, but higher hospital admission rates and costs.4 Selection bias could potentially explain the differences in findings, because individuals in the Parente et al study chose a CDHP over a traditional plan and therefore may have been more apt to delay seeking medical care, possibly leading to more serious medical conditions and high-cost hospitalizations.

Finally, our utilization results are similar to those of the aforementioned recent studies on HSAs/HRAs except that use of preventive services did not decrease in those studies.5-10 This difference may be explained by important design characteristics of prior studies, including waiving the deductible for preventive services in the CDHP and/or HDHP group and the fact that the study population was usually offered a choice between plans, did not have to be continuously enrolled for the entire study period, and/or was not limited to a particular industry. Other studies that have evaluated cost sharing related to preventive services have found decreased utilization with higher out-of-pocket costs.16-20

The strengths of this study include the reduction of selection bias due to the full replacement of the traditional plan with the HSA-eligible plan, a comparable control group, the use of a single industry category and geographic region, and the continuous enrollment of subjects, which allowed us to evaluate within-person variation over a 4-year period.

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