Even Blue Cross/Blue Shield Likes Consumer-Driven Health Care

The latest presentation from the Blue Cross Blue Shield Association (BCBSA) continues the steady drumbeat of positive data about the take-up of consumer-driven health plans (CDHP), which has reached (fingers crossed) its tipping point.

It’s an outstanding presentation, prepared by Maureen Sullivan, senior VP at BCBSA (with whom I’m not acquainted). There’s no point in my regurgitating it for you. However, I’ve got some key take-aways that might differ somewhat from those that BCBSA would like you to retain.

  • The CDHP population now looks very similar to the non-CDHP population. Fears of risk selection, i.e., that CDHPs are only for the young and healthy, are misplaced.
  • The benefits of the patient having “skin in the game” are not really very apparent unless the patient actually opens and has money in a Health Savings Account (HSA) or similar vehicle. So, some “paternalism” from the employer in funding the account is often appropriate.
  • Price (to the patient, i.e. out-of-pocket cost) is the primary driver of decisions: not quality. Even though BCBSA members (according to the presentation) are investing a lot in determining and communicating quality of providers, respondents did not really take this information into account.

I conclude (tentatively) that the money, which payers are investing in measuring and communicating quality (which BCBSA plans brand “Blue Distinction”), is largely misdirected. Payers resist this conclusion fiercely, because it minimizes their value added, which doesn’t really add much value, as I’ve argued before.

Imagine if your automobile insurer decided to tell you which was the right car to buy. You’d tell Geico or Progressive, or whichever one it is, to stop wasting your money assessing the “quality” of different cars, and lower the premiums instead! But the Government has screwed up health care far too much to expect a similar response from health plans.

In fact, when I read the press release from BCBSA, I had a response that often comes to me when I read about American health care: We discuss it in language that would be absurd in any other area of our lives. Imagine this statement coming from the banking industry:

“People enrolled in consumer-directed banking (CDB) are more likely to budget for household costs, according to new survey results released by the American Bankers Association. Collectively, American banks serve 4.4 million consumer-directed banking members – up 50% from last year. Of these, 2.9 million have checking accounts and 1.5 million have savings accounts. In order to grow the number of people who enrol in consumer-directed banking, as well as the number of CDB enrollees who ultimately open checking or savings accounts, banks and employers must continue to work together to share information with consumers on how they can best use CDB.”

Ridiculous, right? But we are so far away from controlling our health care dollars that we have trouble seeing it.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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