Do “Consumer-Directed” Health Plans Bend the Cost Curve Over Time?

53 Pages Posted: 23 Mar 2015 Last revised: 19 Jun 2023

See all articles by Amelia Haviland

Amelia Haviland

RAND Corporation

Matthew Eisenberg

Carnegie Mellon University

Ateev Mehrotra

Harvard University - Harvard Medical School

Peter J. Huckfeldt

RAND Corporation

Neeraj Sood

University of Southern California; National Bureau of Economic Research (NBER); RAND Corporation; University of Southern California - Schaeffer Center for Health Policy and Economics

Date Written: March 2015

Abstract

“Consumer-Directed” Health Plans (CDHPs) combine high deductibles with personal medical accounts and are intended to reduce health care spending through greater patient cost sharing. Prior research shows that CDHPs reduce spending in the first year. However, there is little research on the impact of CDHPs over the longer term. We add to this literature by using data from 13 million individuals in 54 large US firms to estimate the effects of a firm offering CDHPs on health care spending up to three years post offer. We use a difference-in-differences analysis and to further strengthen identification, we balance observables within firm, over time by developing weights through a machine learning algorithm. We find that spending is reduced for those in firms offering CDHPs in all three years post. The reductions are driven by spending decreases in outpatient care and pharmaceuticals, with no evidence of increases in emergency department or inpatient care.

Suggested Citation

Haviland, Amelia and Eisenberg, Matthew and Mehrotra, Ateev and Huckfeldt, Peter J. and Sood, Neeraj, Do “Consumer-Directed” Health Plans Bend the Cost Curve Over Time? (March 2015). NBER Working Paper No. w21031, Available at SSRN: https://ssrn.com/abstract=2583580

Amelia Haviland (Contact Author)

RAND Corporation ( email )

1776 Main Street
P.O. Box 2138
Santa Monica, CA 90407-2138
United States

Matthew Eisenberg

Carnegie Mellon University ( email )

Pittsburgh, PA 15213-3890
United States

Ateev Mehrotra

Harvard University - Harvard Medical School ( email )

25 Shattuck St
Boston, MA 02115
United States

Peter J. Huckfeldt

RAND Corporation ( email )

1776 Main Street
P.O. Box 2138
Santa Monica, CA 90407-2138
United States

Neeraj Sood

University of Southern California ( email )

2250 Alcazar Street
Los Angeles, CA 90089
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

RAND Corporation ( email )

P.O. Box 2138
1776 Main Street
Santa Monica, CA 90407-2138
United States

University of Southern California - Schaeffer Center for Health Policy and Economics ( email )

635 Downey Way
Los Angeles, CA 90089-3333
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
44
Abstract Views
671
PlumX Metrics