Who’s Moving to Consumer-Driven Health Plans? Doctors’ Offices!

We have long cheered the rapid growth in consumer-driven health plans. Here’s more good news: Medical groups are increasingly covered by these policies. The American Medical Group Association just released a survey of its members:

The survey revealed that HDHPs along with CDHPs made up more than 1/3 of health plans analyzed and were as prevalent as PPOs. These plan types dwarfed HMOs, which made up only about 10% of analyzed plans.

The survey shows monthly HDHP and CDHP premiums are, on average, 80-85% of the premium of PPO plans. Medical groups also cover a slightly larger percent of the premium of HDHPs. Many groups with HDHPs include healthcare savings accounts with tax incentives or employer-funded reimbursement accounts for routine care. The yearly deductible for HDHPs is, on average, more than 4 times the deductible of PPO and HMO plans, exemplifying coverage focus on catastrophic illness.

The increasing prevalence of high deductible plans generally shows the desire of payers to hold consumers accountable for utilization and reduce unnecessary care. However, a lack of transparency of price and quality impacts consumer ability to make informed decisions about their healthcare resulting in consternation that reduction in needed care could counteract any gains made. Over 70% of the health plans analyzed within the survey were self-funded.

Over 40 health systems, hospitals and physician group practices from 23 states participated in the survey. Benefits data represent more than 16,000 physicians across specialties.

The use of the verb “dwarfed” to describe the tiny share of HMO coverage is interesting. Physicians and their staff — by their behavior — are telling us that they trust themselves as consumers to keep health costs down and quality up better than they trust themselves as bureaucrats in a top-down system. This bodes ill for Obamacare’s ACOs, BPCIs, VBPMs, and whatever other acronyms are in the mix.

The emphasis on “lack of price and quality” is also interesting. Physician: Health Thyself! If physicians and their own staff, when in the role of patients, are frustrated at this longstanding problem, there is hope for improvement.

Comments (22)

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  1. Matthew says:

    This is good news that doctors offices are moving to support CDHPs. This is best for consumers and physicians alike, and a great improvement to Obamacare.

  2. Dale says:

    “This bodes ill for Obamacare’s ACOs, BPCIs, VBPMs, and whatever other acronyms are in the mix.”

    Down with bureaucratic acronyms!

  3. Buddy says:

    Perhaps now there is hope for improvement. As long as CDHPs continue to grow they cannot be ignored. Consumers know how to keep costs down and its certainly more efficient than anything that the government can pass through.

  4. Frank says:

    There is certainly room for improvement now as CDHP gain more tractions

  5. Don Levit says:

    Premiums are 85 percent of competitors’ premiums while the deductibles are four times as high
    That does not seem like much of a discount – only 15 percent for all that exposure
    For those self funded plans it would be more cost effective to use Health Matching Insurance which for $300 a month could produce $25,000
    In paid for benefits
    By transferring $25,000 of risk per employer over to National Prosperity Life and Health from the first dollar of claims the employer reduces it’s exposure 60 percent
    That is a discount of 60 percent from traditional plans with a zero deductible and including medical trend
    Don Levit
    Treasurer of NPLH

  6. Devon Herrick says:

    However, a lack of transparency of price and quality impacts consumer ability to make informed decisions about their healthcare resulting in consternation that reduction in needed care could counteract any gains made…

    At least physicians are keenly aware of the problem. The problem I’ve run into is that the doctor doesn’t know how much he/she will get paid for a given procedure.

  7. Kellyn says:

    Hi. What options do I have purchasing insurance in the individual private market outside Obamacare? Are there any? Supposedly my plan (BCBSIL BLUE EDGE HSA 5000) is on the chopping block and due to terminate at the end of this year. I can’t get a straight answer from BCBSIL re the future status of my plan; a supv told me today it depends on “what the government tells us to do.” What a mess! I purchased my plan in 2008 and since then, BCBSIL has told me my plan is grandfathered and will not be canceled; but today they were not sure. My accompanying HSA is well funded, and if my plan gets cancelled, what happens to my HSA? Also do you know how I can find out definitively if my plan will be cancelled? Thank you.

    • John R. Graham says:

      I regret we don’t give personal advice at this blog. However, an HSA is the property of the account-holder. If the person loses the qualifying health plan, she cannot contribute more to the HSA. However the HSA and the money inside it are her property.

  8. Ron Greiner says:

    [The survey shows monthly HDHP and CDHP premiums are, on average, 80-85% of the premium of PPO plans.]

    This is crazy talk. Even when I wrote the first tax-free HSA/MSA in 1996 it was a PPO product. I can’t believe people read this stuff and don’t correct it.

    The NCPA says Golden Rule enrolled the first tax-free MSA but that’s not true. TIME Insurance Company, America’s oldest health insurance company, is the company I used. I couldn’t wait for those slow pokes at Golden Rule.

    • John R. Graham says:

      As a beneficiary, I’ve had two qualifying HDHP in the small-group market, one in California and one in Texas. Both were PPOs. From the perspective of the insurer, I can’t imagine why they would not use the existing PPO network for their HDHPs.

      I have read lots of these surveys and they usually differentiate like this. I don’t know why becuase the HMO/PPO/PSO classification refers to the design of the provider network, right? Not whether the plan qualifies for an HSA.

      Maybe it’s just a “legacy” way of discussing things.

      As to who wrote the first MSA-eligible policy, are you suggesting that you are the first broker in the U.S. to write such a policy?

      • Ron Greiner says:

        That is correct and the 1st tax-free MSA was a 24-year-old male paying $24 a month for coverage in Nebraska with a $2,250 deductible that paid 100% after the deductible.

        He had to switch because his COBRA was ending from his father’s death.

        I had 3 of the 1st 5 tax-free MSAs.

        Today on the exchange you have a choice of an HMO, you get nothing if you go out of network, and PPO. Typically you get 80% payment for going out of network and the penalty is capped.

        TIME and Golden Rule are bringing added competition in 2015 to some of the exchanges. TIME doesn’t have an HMO. Golden Rule has an HMO, figures. TIME is in more states (43) with Individual Health Insurance than any other company. No other company is even close.

        That’s why I say, it’s TIME for your HSA.

        I told Devon that his MSA history should have been – A Brief History of TIME – sounds better.

        • John R. Graham says:

          So, I guess that 24-year old would be 42-years old today, right? How’s he doing?

          • Ron Greiner says:

            He was 24 years old in October in 1996. We lost this 1st MSA when he took a job with the State of Nebraska. Of course we still do customer service on the oldest HSAs in the country. Some of them have large HSA balances now. Our HSA clients may have larger balances because we told them to pay medical, vision and dental expenses with their ordinary checkbook and keep all of these receipts because they have the [freedom] to withdraw these funds from their HSA at anytime in the future. They could whip out $10,000 in receipts and go on a cruise.

            The typical response when I ask them if they are taking withdrawals from their HSA is, “Oh No, we just make deposits.” Then I ask them if they are keeping their receipts and they say, “Of course.”

            We had the national account with 7-11 before 1/1/1996. We still have to bill 7-11 each month manually because for some reason the computer systems can’t do it. TIME Insurance Company lost big time with 7-11 because it seems they all got cancer or had heart attacks. The 7-11 accounts were a nightmare because a lot of them can’t speak English.

            The very 1st 7-11 MSA is a very good friend. He had a heart attack and then quit smoking so his premium dropped by 40%. At the 1st meeting of 7-11 franchisees in St. Louis about 1/2 of the 144 store owners brought their insurance agents with them and it was all out war with those agents. They were all screaming, “This is illegal!”

  9. Ron Greiner says:

    Deloris, nobody has stress and I’m not going to be your slave, sorry.

    Americans don’t want to be slaves.

    Americans want to live in the land of the FREE and the home of the brave.

    Deloris, Forbes reports: Andre Scholz, Age 34 – Director, Chief Technology Officer. Andre Scholz has more than 15 years business experience in Internet, telecommunication technology and IT security. He holds an advanced degree from the University of Stuttgart and Konstanz in electronic engineering. Mr. Scholz is a consultant and well known technical expert for numerous social networks, communities and high-traffic sites, active around the world. He brings a wealth of social network and internet knowledge to Kiwibox. Mr. Scholz was co-founder of various internet exchange points and manages them until now. Since 1996(16-yrs-old) he is Managing Director of a carrier and Internet Service Provider in Stuttgart, Germany and since 2002 he is CEO of the Interscholz company group, Leonberg, Germany, which places private investments in and is managing and operating various companies.

    Andre, my 1st sales manager, ARLO, told me, “My Grandfather wrote a book called the “Power of Prayer” you should read it.”

    All that God is, and all that God has, is at the disposal of prayer. Prayer can do anything that God can do, and as God can do everything, prayer is omnipotent.”
    ― R.A. Torrey

    Andre, you are what you is and that’s all that it tis.

    Amos and Andre could you please: Speak more clearly…

    https://www.youtube.com/watch?v=oblbLHYu6uY

    Better luck next TIME Andre. I suggest don’t be a FRAUD and study Zig Zigler:

    https://www.youtube.com/watch?v=8iOUDtOWwU4

    Geez, training these schnitzels can take all day!

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