Working Paper: NBER ID: w20927
Authors: Peter J. Huckfeldt; Amelia Haviland; Ateeve Mehrotra; Zachary Wagner; Neeraj Sood
Abstract: Prior studies suggest that consumer-directed health plans (CDHPs) -characterized by high deductibles and health care accounts- reduce health costs, but there is concern that enrollees indiscriminately reduce use of low-value services (e.g., unnecessary emergency department use) and high-value services (e.g., preventive care). We investigate how CDHP enrollees change use of pharmaceuticals for chronic diseases. We compare two large firms where nearly all employees were switched to CDHPs to firms with conventional health insurance plans. In the first firm’s CDHP, pharmaceuticals were subject to the deductible, while in the second firm pharmaceuticals were exempt. Employees in the first firm shifted the timing of drug purchases to periods with lower cost sharing and were more likely to use lower-cost drugs, but the largest effect of the CDHP was to reduce utilization. Employees in the second firm also reduced utilization, but did not shift the timing or use of low cost drugs.
Keywords: Consumer-Directed Health Plans; Pharmaceutical Utilization; Cost Sharing; Health Economics
JEL Codes: I11; I13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| CDHP adoption (I13) | overall drug utilization (I19) |
| CDHP adoption (I13) | total spending on statins (H51) |
| CDHP adoption (I13) | timing of drug purchases (G14) |
| CDHP adoption (I13) | use of low-cost drugs (I10) |
| CDHP adoption (I13) | medication adherence (I18) |
| CDHP adoption (I13) | future healthcare costs (I11) |