Health Plans Driven by Uneducated Consumers Doomed to Fail

January 15, 2008 ( - Consumer-driven health plans (CDHPs), designed to rely on consumers' active involvement in their own care, are doomed to fail if health education initiatives are not more effective.

This was the conclusion of a study published by the Employee Benefit Research Institute (EBRI) in the January 2008 EBRI Issue Brief. “Should health education initiatives prove ineffective, the ‘consumer-driven health movement’ could well be doomed, especially if it relies upon fully educated health consumers taking self-initiated actions,” the study authors wrote.

Study authors Lois A. Vitt, founding director of the Institute for Socio-Financial Studies in Middleburg, Virginia, and Ray Werntz, an EBRI Fellow, suggest: “Values-focused financial education that includes health coverage and care can help consumers adopt healthier behaviors, increase their access to coverage, enhance their ability to participate actively in patient-centered care, and raise their levels of understanding about health-related finances.” The authors point out consumers are not aware of the real cost of medication and services for which they make a co-payment, nor do they think of countering a physician’s determination with a lower-cost alternative that could save them or their insurance companies money.

The Issue Brief notes that while consumers’ knowledge of health insurance issues and active involvement in their own care is essential to achieving quality health care that is safe and affordable, they have “little or no input” into the consumer-driven plans that policymakers and employers are currently discussing. The authors suggest that consumers are not receiving health education that takes into account their personal circumstances and values – powerful motivators in the psychology of decisionmaking.

According to Vitt and Werntz, “Trying to ‘activate consumerism’ by promoting consumer-directed health plans seems little different from past managed care attempts to stem out-of-control health costs by changing consumer behavior.” The authors point out these “top down” approaches, structured without a better understanding of what consumers need to know and what they value, are likely to be ineffective over time.

The authors further assert there is no research consensus that CDHPs alone will contain health care costs. According to the issue brief, CDHP take-up rates have historically been low and could remain low (See CDHP Offerings not to Increase as Predicted ). Additionally, CDHPs could have an adverse impact on older and/or sicker consumers while rewarding the healthy, as studies have found increased cost sharing leads to decreased health care use.

Vitt and Werntz suggest health care costs will decrease when a variety of societal factors are used to encourage consumers to live healthier lifestyles.

The EBRI Issue Brief is here .