Consumer-Directed Health Plans: New Evidence on Spending and Utilization

Abstract

This study examined three-year spending and utilization trends associated with enrollment in a consumer-directed health plan (CDHP) offered by a large employer alongside a preferred provider organization (PPO) and a point-of-service (POS) plan. The CDHP cohort spent considerably more money on hospital care than the POS cohort. Results found evidence of pent-up demand in the CDHP, but not enough to explain the spending trend. Lower prescription drug spending—where the CDHP modestly controlled allowable costs—was associated with less hospital and emergency room use in following periods. Findings suggest the CDHP had too little out-of-pocket cost-sharing to control medical spending.