As high-deductible health plans (HDHPs) grow in popularity, the University of Michigan Center for Value-Based Insurance Design is advocating for a clinically nuanced alternative to the traditional HDHP.
This article was collaboratively written by A. Mark Fendrick, MD, director of the Center for Value-Based Insurance Design (V-BID), and several V-BID Center staff.
Receiving a cancer diagnosis can be one of the most terrifying moments of a patient’s life, but for many patients with high-deductible health plans (HDHPs), their fears go beyond the disease itself to concerns about the ability to pay for necessary treatments. For the millions of Americans enrolled in increasingly popular HDHPs, a cancer diagnosis can mean thousands of dollars in out-of-pocket costs before their health plans even begin to kick in to pay part of the bill. These high deductibles often result in a patient’s decision to delay or forgo care, a decision that can mean life or death for patients with cancer.
Originally designed to engage consumers in choosing lower-cost care options, thereby reducing healthcare spending, studies have shown that HDHPs result in nonspecific reductions in the use of both low- and high-value services. A recent study of newly diagnosed breast cancer patients published in the Journal of Clinical Oncology and featured in The New York Times illustrates this unintended consequence of high-deductibles.
When faced with a possible breast cancer diagnosis, patients with high deductibles were more likely to delay necessary next steps and treatments, such as diagnostic imaging and biopsies, lumpectomies and mastectomies, and chemotherapy. Though the study did not include a longitudinal analysis of the effect of initial delays in treatment on patient outcomes, it is widely acknowledged that prognoses improve with earlier detection and treatment.
Despite concerns over patients’ underuse of necessary services, HDHPs have continued to grow in popularity, with nearly 20 million enrollees and more than half of covered workers in the United States facing a plan deductible of $1000 or more. This popularity has necessitated efforts to mitigate the negative financial and health effects of HDHPs.
The University of Michigan Center for Value-Based Insurance Design (V-BID) has long advocated for the High-Value Health Plan (HVHP), a clinically nuanced alternative to traditional HDHPs. In an HVHP, the IRS “safe harbor” established for predeductible coverage of recommended preventive health services would be expanded to cover certain high-value, clinically-indicated health services prior to meeting the plan deductible. Such an arrangement would provide for improved coverage options without fundamentally altering the original intent and spirit of consumer engagement inherent in HDHPs.
Expanding the IRS “safe harbor” would increase the attractiveness and clinical effectiveness of HDHPs and would better align consumer engagement with provider payment reform initiatives. Adoption of voluntary, clinically-nuanced HVHPs has the potential to mitigate cost-related non-adherence, enhance patient-centered outcomes, allow for premiums lower than most preferred provider organizations and health management organizations, and substantially reduce aggregate healthcare expenditures. The HVHP would provide millions of Americans a plan option that better meets their clinical and financial needs.