To judge by recent headlines, it seems the concept of consumer-driven health care (CDHC) has taken a severe beating.
News stories have highlighted studies by the Government Accountability Office and the RAND Corporation that purport to show CDHC plans, especially health savings accounts (HSAs), are primarily for the wealthy. The studies further claim that they probably won’t work regardless because patients don’t make very good health-care consumers and most health-care expenses are catastrophic and hence not subject to consumer choice. Yet these studies either have serious flaws or are being interpreted incorrectly.p> Patients Don’t Make Good Health Care Consumers br> David Wessel got this ball rolling in the Wall Street Journal by citing a study from the RAND Corporation of 236 elderly patients in two managed-care plans. The study found that these patients often rated their health care as excellent regardless of the actual quality of that care. Wessel suggested that, in health care, the “consumer theory falls flat.” Ezra Klein, at the American Prospect , upped the ante, dismissing CDHC as “a silly idea.” /p>
Wessel and Klein are drawing implications from the RAND study that are unwarranted. To see this, simply ask yourself, what experience have the 236 elderly people had as health-care consumers? CDHC is a relatively new concept, and most of the patients in the RAND study have probably spent most of their lives in traditional health insurance where they simply went to the doctor and a health insurance company paid the bill. In other words, they have never done any of the many things — shop around, compare prices, consider quality, etc. — that they would if they were consumers of health care. To expect this demographic to be consumers of health care is a bit like asking Eskimos to rate the quality of suntan lotion. If you wanted to know how effective patients are as consumers of health care, you would need to study a group that had been enrolled in CDHC plans for a few years. What the RAND study really does is gauge people who have been enrolled in a non-consumer based health-care system their entire lives and do not have the skills to be discerning health-care consumers.