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Study finds fewer office visits, prescriptions with CDHPs
Consumer-directed health plans (CDHPs), designed to encourage employees to make more cost- and health-conscious decisions, have been shown to reduce the long-term use of outpatient physician visits and prescription drugs, according to new research by the nonprofit Employee Benefit Research Institute (EBRI). Although that may save the consumer and the health plan sponsor money in the short-run, skipping preventative services can lead to more expensive treatments, including high-cost emergency room services, for many conditions. Many preventive services are covered by CDHPs on a first-dollar basis, but plan enrollees may be unaware of that.
The findings were published in the June 2013 issue of the journal Health Affairs in the article “Consumer-Directed Health Plans Reduce the Long-Term Use of Outpatient Physician Visits and Prescription Drugs.” The research was conducted through the EBRI Center for Research on Health Benefits Innovation.
CDHPs typically combine a higher-deductible, lower-premium health plan with a tax-advantaged account that enrollees can use to pay for health care expenses — most commonly a health savings account (HSA) or a health reimbursement arrangement (HRA). Individuals in consumer-directed health plans, whether linked to an HSA or HRA, must keep track of funds in their accounts. If they use up the funds before meeting the deductible in a given year, they must pay the difference out of pocket. After an enrollee meets the deductible, the plan operates much like a traditional preferred-provider organization (PPO) plan.
The theory behind CDHPs is that if participants must meet a high deductible before their insurance benefits are triggered, they will be encouraged to make better health care decisions, such as not going to an emergency department when a visit to a physician would suffice.
The EBRI’s research used data from two large employers — one that adopted an HSA plan for all of its employees in 2007 and another with no CDHP — and found that after four years under the HSA plan, enrollees made 0.26 fewer physician office visits per year and had 0.85 fewer prescriptions filled, although they made 0.018 more emergency department visits (all of which are considered statistically significant).
In addition, the likelihood of individuals’ receiving recommended cancer screenings was lower under the HSA plan after one year and, even after recovering somewhat in later years, still lower than baseline at the study’s conclusion.
CDHPs as single option
Although usually offered alongside more traditional health plan designs, CDHPs are slowly increasing as employers’ only health insurance offering.
“The availability of CDHPs — both as a choice and on a full-replacement basis — is expected to continue to increase,” noted Paul Fronstin, director of the EBRI’s Health Research and Education Program and co-author of the report, in a media release. “Recent regulatory decisions related to employer contributions to HRAs and HSAs, combined with the excise tax on high-cost health plans that takes effect in 2018, make CDHPs more attractive to employers because they may keep costs below the threshold that triggers the tax. This emphasizes the importance of understanding the long-term implications of increased reliance on CDHPs for the use of health care services and spending.”
“Past studies of the impact of these programs on health services’ use have been limited by the potential for selection bias, because enrollees were often given a choice between CDHPs and more traditional options,” explained Christopher Roebuck, president of health economics and policy consulting firm RxEconomics, an EBRI fellow and a report co-author. “This meant that those who chose CDHPs might have fit a particular profile, making it difficult to discern the independent effects of the CDHP.”
Providing information on preventive services
“Given these findings, employers should consider providing periodic, ongoing communications to enrollees regarding services that are exempted from the deductible,” suggested Martín J. Sepúlveda, IBM fellow and vice president of health industries research at the IBM Corp, who also co-authored the report.
Under the Patient Protection and Affordable Care Act (PPACA), for example, coverage of preventative health care — including annual physicals, vaccines and cancer screenings under specified guidelines — must be provided on a first-dollar basis, outside of the deductible, including for those enrolled in HSA- or HRA-linked plans.
However, “as long as visits to obtain prescriptions for screening services are subject to the deductible, additional information about screening services might not be sufficient,” the report noted. “Plans might also consider monitoring the use of recommended preventive services in order to address nonuse that is not attributable to factors such as changes in eligibility for recommended services or screening recommendations.”
Prescription drugs for chronic health conditions are not considered preventative care and, therefore, are only reimbursable in an HSA-linked plan after the deductible is met; HRA-linked plans may cover prescription drugs outside of the deductible.
Stephen Miller, CEBS, is an online editor/manager for SHRM.
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Lowe’s thanks troops with D.C. charity grill-off
"Grill Sergeants" were turned loose on servicemen and their families during a charity grill-off this weekend at Nationals Park in Washington, D.C.
Lowe’s, which counts 16,000 military veterans on its payroll, and the USO treated hundreds of servicemen and women and their families to the charity grill-off. “Grill Sergeants” from each branch of the military put their grilling skills to the test during the all-star grilling competition.
“Today, Lowe’s gave military families a chance to have a great time,” said USO president and CEO Sloan Gibson. “Their generous donation also makes it possible for the USO to continue providing important programs and services to those who need us most. On this Fourth of July, we are grateful to Lowe’s for joining us as we show our troops that their service and sacrifice are appreciated.”
The winning Grill Sergeant, Lance Cpl. Noah Bratcher of the U.S. Marines and his wife Cassandra, created the best burger among six branch chefs who fired up their Lowe’s Master Forge grills. Lowe’s also donated $100,000 to the USO.
Market Recap: RISI Crow’s Construction Materials Cost Index
A price index of lumber and panels used in actual construction for June 28, 2013
*Western – regional species perimeter foundation; Southern – regional species slab construction.
Crow’s Market Recap — A condensed recap of the market conditions for the major North American softwood lumber and panel products as reported in Crow’s Weekly Market Report.
Lumber: SPF lumber producers entered the week offering significant discounts, but Wednesday, increased buying activity generated firmer quotes. One producer’s third-quarter sales to China were given credit for the increased buying, as traders covered shorts and purchased a little extra. The slow turnaround in the Southern Pine lumber market continued, as more producers sought higher prices for more items. After ridding themselves of higher priced inventory, treaters purchased substantial volumes. East zone mills struggled more than those in the Central and West regions to sell dimension lumber at higher prices. Volumes sold in the Coastal species lumber market improved, helping to both limit discounts and propel a few prices higher. Production curtailments helped apply the brakes to additional supplies entering the market. Inland species lumber demand from retailers has brightened a little, helping prices to firm up. Improvements in demand for Spruce lumber, combined with gains in lumber futures, have restored some of the optimism of the market. Some cracks began to show up in Radiata Pine Mldg&Btr lumber, but shop prices held up better. More Ponderosa Pine Mldg&Btr volumes are available than in past weeks, and some discounts are being accepted by producers. Ponderosa Pine 1×4 and 1×8 #2 boards are weak, as are 1×6 and 1×8 #3. Selects are very stable and of modest interest among buyers. Wide widths overall are less subject to price erosion, with the exception of ESLP 1×12 #3, which is weak. Western Red Cedar producers generally experienced steady to improved sales activity. Buyers located in the Midwest participated in greater numbers, giving mills more orders than in prior weeks.
Panels: Despite the fact that OSB prices have plunged sharply over the last several weeks, the price declines are not yet over. Eastern Canada, which has been largely shielded from the heaviest price decreases, is now seeing some real pullbacks in price. Moderately improved sales activity at midweek allowed Southern Pine plywood producers to raise quotes off discounts used early to sell prompt shipping volumes. Still, most prices ended lower than the prior week’s levels. Sales were strong enough in the Western Fir plywood market to dry up most of the sheathing discounts and raise some quotes above the prior week’s price levels. Canadian softwood plywood firmed nicely as this week progressed. Buyers who reported being able to secure wood at discounted levels early in the week were rebuffed by mills on Thursday. Having drawn inventories down prior to the end of the quarter, yards increased their volumes purchased. Prices remained steady in the particleboard market. Order files for particleboard in the East were as extended as producers wanted them, in some instances out into August. MDF prices held firm, as buyers continued to absorb all production.