The Cost/Quality Conundrum

  • by: |
  • 06/11/2013

The study found that members in one large employer’s health plan filled significantly fewer prescriptions following a transition from a preferred-provider organization PPO plan to a consumer-directed health plan. The study followed more than 13,000 individuals for five years.

The article cites a Towers Watson employer survey finding that the percentage of employers offering only CDHPs to employees increased from 5% in 2007 to 8% in 2012 and is expected to rise to 13% in 2013.

Enhanced quality? Better outcomes? No, lower cost.

Regulations pertaining to the tax treatment of health reimbursement arrangements and HSAs as well as ACA’s excise tax on high-cost health plans that takes effect in 2018 “make CDHPs more attractive to employers because they may keep costs below the threshold that triggers the tax.”

Outpatient physician visits showed a significant decline and emergency department (ED) visits showed a significant increase for the study group over the four years following the switch to a CDHP. “When it comes to the initial decline in prescription drug use, this may be the result of fewer outpatient office visits or simply the introduction of the CDHP,” the article says. “However, it is unknown whether people only reduced unnecessary prescriptions or reduced the use of necessary pharmaceutical services. If the latter occurred, it may explain the longer-term increase in ED use.”

“The increase in ED use might stem from the long-term implications of reductions in physician office visits and prescription drug use after the CDHP was implemented. Fewer physician office visits may lead to the writing of fewer prescriptions, which could in turn mean that individuals with chronic conditions are less adherent to recommended medication therapy,” the article says. However, the article adds that more study is needed to determine the cause for the increase in ED visits.

It will be interesting to analyze the paper to see the intricacies of the benefit structure and whether that played a role in the drops in outpatient office visits and RX use and increased ED visits.


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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