Evaluation of the effect of a consumer-driven health plan on medical care expenditures and utilization.
OBJECTIVE
To compare medical care costs and utilization in a consumer-driven health plan (CDHP) to other health insurance plans.


METHODS
We examine claims and employee demographic data from one large employer that adopted a CDHP in 2001. A quasi-experimental pre-post design is used to assign employees to three cohorts: (1) enrolled in a health maintenance organization (HMO) from 2000 to 2002, (2) enrolled in a preferred provider organization (PPO) from 2000 to 2002, or (3) enrolled in a CDHP in 2001 and 2002, after previously enrolling in either an HMO or PPO in 2000. Using this approach we estimate a difference-in-difference regression model for expenditure and utilization measures to identify the impact of CDHP.


RESULTS
By 2002, the CDHP cohort experienced lower total expenditures than the PPO cohort but higher expenditures than the HMO cohort. Physician visits and pharmaceutical use and costs were lower in the CDHP cohort compared to the other groups. Hospital costs and admission rates for CDHP enrollees, as well as total physician expenditures, were significantly higher than for enrollees in the HMO and PPO plans.


CONCLUSIONS
An early evaluation of CDHP expenditures and utilization reveals that the new health plan is a viable alternative to existing health plan designs. Enrollees in the CDHP have lower total expenditures than PPO enrollees, but higher utilization of resource-intensive hospital admissions after an initially favorable selection.
Parente
Stephen T
ST
Carlson School of Management, Department of Healthcare Management, University of Minnesota, 321 19th Avenue South, Suite 3-149, Minneapolis, MN 55455, USA.
Feldman
Roger
R
Christianson
Jon B
JB
D002755:Choice Behavior; D015331:Cohort Studies; D003258:Consumer Behavior / Q000191:economics* / Q000706:statistics & numerical data; D003669:Deductibles and Coinsurance / Q000706:statistics & numerical data*; D005260:Female; D006264:Health Benefit Plans, Employee / Q000191:economics* / Q000592:standards; D005102:Health Expenditures / Q000706:statistics & numerical data*; D006279:Health Maintenance Organizations / Q000191:economics / Q000592:standards / Q000706:statistics & numerical data; D006301:Health Services Needs and Demand; D006801:Humans; D015273:Insurance Selection Bias; D008297:Male; D008329:Managed Care Programs / Q000191:economics / Q000592:standards / Q000706:statistics & numerical data*; D020402:Medical Savings Accounts / Q000191:economics / Q000592:standards / Q000706:statistics & numerical data*; D011243:Preferred Provider Organizations / Q000191:economics / Q000592:standards / Q000706:statistics & numerical data; D012044:Regression Analysis; D012959:Socioeconomic Factors; D013997:Time Factors; D014481:United States