Working Paper: NBER ID: w21031
Authors: Amelia M. Haviland; Matthew D. Eisenberg; Ateeq Mehrotra; Peter J. Huckfeldt; Neeraj Sood
Abstract: “Consumer-Directed” Health Plans (CDHPs) combine high deductibles with personal medical accounts and are intended to reduce health care spending through greater patient cost sharing. Prior research shows that CDHPs reduce spending in the first year. However, there is little research on the impact of CDHPs over the longer term. We add to this literature by using data from 13 million individuals in 54 large US firms to estimate the effects of a firm offering CDHPs on health care spending up to three years post offer. We use a difference-in-differences analysis and to further strengthen identification, we balance observables within firm, over time by developing weights through a machine learning algorithm. We find that spending is reduced for those in firms offering CDHPs in all three years post. The reductions are driven by spending decreases in outpatient care and pharmaceuticals, with no evidence of increases in emergency department or inpatient care.
Keywords: consumer-directed health plans; health care spending; cost-sharing; difference-in-differences
JEL Codes: I11; I13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| offering CDHPs (I11) | total health care spending (H51) |
| offering CDHPs (I11) | outpatient care spending (I11) |
| offering CDHPs (I11) | pharmaceutical spending (H51) |
| offering CDHPs (I11) | emergency department spending (H51) |
| offering CDHPs (I11) | inpatient care spending (H51) |
| offering CDHPs (enrolled) (I11) | total health care spending (H51) |