High deductible health plans: does cost sharing stimulate increased consumer sophistication?

Abstract

Objective To determine whether increased cost sharing in health insurance plans induces higher levels of consumer sophistication in a non-elderly population.Study design This analysis is based on the collection of survey and demographic data collected from enrollees in the RAND health insurance experiment (HIE). During the RAND HIE, enrollees were randomly assigned to different levels of cost sharing (0, 25, 50 and 95%).Methods The study population compromises about 2000 people enrolled in the RAND HIE, between the years 1974 and 1982. Effects on health-care decision making were measured using the results of a standardized questionnaire, administered at the beginning and end of the experiment. Points of enquiry included whether or not enrollees' (i) recognized the need for second opinions (ii) questioned the effectiveness of certain therapies and (iii) researched the background/skill of their medical providers. Consumer sophistication was also measured for regular health-care consumers, as indicated by the presence of a chronic disease.Principal findings We found no statically significant changes (P < 0.05) in the health-care decision-making strategies between individuals randomized to high cost sharing plans and low cost sharing plans. Furthermore, we did not find a stronger effect for patients with a chronic disease. ConclusionsThe evidence from the RAND HIE does not support the hypothesis that a higher level of cost sharing incentivizes the development of consumer sophistication. As a result, cost sharing alone will not promote individuals to become more selective in their health-care decision-making.

Deductibles in Health Insurance, Beneficial or Detrimental: A Review Article

“…Similarly, the findings of Reed ( 20 ) also confirmed the fact that individuals’ knowledge about deductibles structure and services covered by this plan influences utilization of the services, so that it can limit the achievement to the goals of implementing deductibles plans. In another study, regarding adoption of health care decision-making strategies no significant difference was observed between those registered in high-cost sharing plans and those registered in low-cost sharing plans ( 17 ). According to Gupta, presence of relevant information on deductibles is highly important and necessary to decide on how to use health care services.…”

Consumer sophistication as an enhancer of innovation in the food industry: measurement development and validation

“…Step 1: Specify domain and dimensionality of the construct First, the domains and dimensions of consumer sophistication were identified. The characteristics sophisticated consumers were identified based on the existing literature on political sophistication (Danckert et al, 2017;Fiske et al, 1990;K€ olln, 2018;Luskin, 1987;Rhee and Cappella, 1997;Weitz-Shapiro and Winters, 2017) and consumer sophistication Consumer sophistication (Barnes and McTavish, 1983;Garry, 2007;Gupta and Polsky, 2015;Kim and La, 2012;Newell et al, 2011;Porter, 1990;Sauer, 2005;Titus and Bradford, 1996). Based on this process, six dimensions of consumer sophistication were identified: knowledge, experience, sensory skills, interest and preference insights, the information process and opinions.…”

“…, 2017; Fiske et al. , 1990; Kölln, 2018; Luskin, 1987; Rhee and Cappella, 1997; Weitz-Shapiro and Winters, 2017) and consumer sophistication (Barnes and McTavish, 1983; Garry, 2007; Gupta and Polsky, 2015; Kim and La, 2012; Newell et al. , 2011; Porter, 1990; Sauer, 2005; Titus and Bradford, 1996).…”

High Deductible Health Plans and Use of Free Preventive Services Under the Affordable Care Act

“…19,20 HDHPs decrease use of both high-and low-value health care and generally do not meet the goal of promoting more engaged consumer behavior. 15,[21][22][23][24][25][26][27][28][29] If patients were able to discriminate in how they reducing health care use, then HDHPs would be an effective remedy against moral hazard, but they often delay, or forego, both high and low-value care instead. 14,27,[30][31][32][33] Consumer understanding of health insurance terminology and benefit design is generally poor so this added benefit could get lost in more salient plan features, like deductibles, meaning that patients may respond to that incentive not fully understanding how they interact.…”

“…19 , 20 HDHPs decrease use of both high- and low-value health care and generally do not meet the goal of promoting more engaged consumer behavior. 15 , 21 - 29 If patients were able to discriminate in how they reducing health care use, then HDHPs would be an effective remedy against moral hazard, but they often delay, or forego, both high and low-value care instead. 14 , 27 , 30 - 33 …”