Spike has done his homework. UPDATE – well, Spike actually quoted a different report, not the original McKinsey one. I should have done some source checking, did not, and apologize for the oversight.) In response to a comment from another reader (Michael Trapier), he read the entire article by McKinsey on CDHPs et al. Here’s Spike’s quote from the article, which deserves its own post. (again, turns out this quote was from an EBRI research report), and read the comments below:
“While people reported using health services at similar rates across health plans, adults with CDHPs and HDHPs were significantly more likely to report that they had avoided, skipped, or delayed health care because of costs than were those with comprehensive insurance, with problems particularly pronounced among those with health problems or incomes under $50,000. The survey asked whether in the last year respondents had delayed or avoided getting health care services when they were sick because of costs. About one-third of people in CDHPs (35 percent) and HDHPs (31 percent) reported delaying or avoiding care, twice the rate of those in comprehensive health plans (17 percent).
Having a health problem made it more likely that people avoided or delayed care. Among people who reported being in fair or poor health or having at least one chronic health condition, those in CDHPs or HDHPs reported delaying or avoiding care at higher rates than those in comprehensive plans: 40 percent of those in CDHPs and 31 percent of people in HDHPs, compared with 21 percent in comprehensive plans. People with HDHPs and CDHPs in households with incomes of under $50,000 were also more likely to avoid or delay care: nearly half of those in CDHPs and more than two in five in HDHPs reported delaying or avoiding care, compared with one-quarter (26 percent) of those in comprehensive plans in that income range.
In addition to delaying or avoiding health care, people in HDHPs were significantly more likely to skimp on their medications than were those in comprehensive plans. The survey asked respondents whether in the last 12 months they had not filled a prescription because of costs. More than one-quarter (26 percent) of those with HDHPs said they had not filled a prescription because of cost, compared with 16 percent of those in comprehensive health plans (Figure 17). Having a health problem made it more likely that people avoided filling prescriptions, particularly those with HDHPs: One-third of those in HDHPs with health problems had not filled a prescription because of cost, compared with one-fifth (21 percent) of people in comprehensive plans.”
That’s a (rather lengthy) quote from the study you cited. In fact, that whole study talks about how total healthcare use is the same for each group, but out of pocket costs are way higher for those in CDHPs and that people in comprehensive group care found that their plan made it easier for them to incpororate costs into their decisions about treatment.
As for health economics, the reality is that as long as there is EMTALA, (which says that hospitals must treat patients in need of emergency care regardless of their ability to pay), creating systems where preventive pay is discouraged will only be more expensive for all of us. And I don’t see anybody having the political will to void EMTALA. We’re all in this together, whether you like it or not.”
That’s a lot of good work, Spike.
Notably, the time period for the study did not enable the researchers to identify changes in health care costs over time. One has to wonder if the failures to comply with drug regimens etc. would actually lead to increased health care costs over time. Actually, you don’t have to wonder.
BTW – the McKinsey report also notes that CDHPs did have a substantial correlation with participants’ awareness of costs; desire to seek alternative treatment, and likelihood of involvement in healthy behaviors. But I wonder if the latter was not an artifact, and if the participants’ healthy behaviors made it more likely that they would select CDHPs.
What does this mean for you?
More evidence that CDHPs will do nothing to reduce medical expenses.

There’s so much spin in the press about Bush’s approach to health care the facts are pretty much ignored. So, as a public service, I’ve winnowed through the partisan, the strident, the pedantic and the ideology-driven cacophony surrounding Bush’s State of the Union proposals for health care to get to the facts about HSAs, CDHPs and consumerism in health care, and the viability of the whole mess .
Here’s the real story, complete with facts, citations, and sources.
HSAs as a means to reduce the number of uninsured
– Robert Laszewski – Bob notes that “increasing the tax-deductibility of out-of-pocket expenses for HSA programs …doesn’t do a whole lot for an uninsured person in a zero bracket…the President’s tax cuts increased the number of low income people who do not pay taxes.” And, studies show fewer than one million of the 46 million uninsured are likely to enroll in HSA plans.
HSAs as a way for consumers to fund health care costs and reduce premiums
That presupposes there is cash in the account to pay for services up to the deductible, and that the policy then covers needed care. Fact is, more than half the 3 million HSAs have not been funded at all – not even a cent. Hard to see how they will pay for care with non-existent funds…
Consumer-directed health plans as a means to reduce health care costs.
No, they won’t. And CDHPs may actually increase health care costs; reports indicate similar programs in other areas have had “unintended consequences” – less compliance with preventive medicine as an example.
Portability of health insurance
Bush’s HSAs are portable, but that does not mean the insurance behind them is. Insurers offering HSAs can still require medical underwriting, which eliminates coverage for chronic conditions and/or increases premiums to a level that is unaffordable. So, insurance is not portable at all. And making it portable would require a drastic change to the COBRA laws, or de-coupling private health insurance from employers. Neither is anywhere close to being considered, much less the subject of legislation. However, Bush’s administration is making an attempt to drastically change existing laws governing these matters – like ERISA, state regulatory authority over insurance plans and the like. These are huge undertakings, and the chances of all the required legal changes actually occuring are zilch.
Viability
This gets to the heart of the matter, which is “do voters believe Bush has credibility when it comes to health care“. A USAToday poll indicates the majority do not. According to California HealthLine, a “USA Today/CNN/Gallup poll of 1,066 U.S. adults conducted between Jan. 20 and Jan. 22 found that about 60% of respondents disapprove of how Bush has addressed health care issues, compared with 40% in mid-2002″.
Couple the citizenry’s skepticism with the potentially negative implications for tax revenue from the Bush proposals, and his stated desire to halve the $900 billion deficit by 2010, and the Bush program looks unattainable.
Which is just as well, as it will do nothing to reduce health cost inflation or expand coverage.