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

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.