Consumer Directed Health Care

Networks Financial Institute Policy Brief No. 2006-PB-20

16 Pages Posted: 14 May 2007

See all articles by John C. Goodman

John C. Goodman

National Center for Policy Analysis

Date Written: December 2006


Consumer driven health care (CDHC) is a potential solution to two perplexing problems: (1) How to choose between health care and other uses of money, and (2) how to allocate resources in an industry where normal market forces have been systemically suppressed. In the consumer-driven model, consumers occupy the primary decision-making role regarding the health care that they receive. From an employee benefits perspective, consumer driven health care in the broadest sense may refer to limited employer contribution or dual option plans featuring high deductible health coverage with tax advantaged savings vehicles such as Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs) and Health Reimbursement Arrangements (HRAs) (Daly, 2005). However, before we consider the solution, we must first investigate why a solution is needed in the first place.

Suggested Citation

Goodman, John C., Consumer Directed Health Care (December 2006). Networks Financial Institute Policy Brief No. 2006-PB-20, Available at SSRN: or

John C. Goodman (Contact Author)

National Center for Policy Analysis ( email )

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Dallas, TX 75243-1739
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