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RAND/Watson Wyatt Study of Consumer-Directed Health Plans

Study Overview

Consumer-directed health plans (CDHPs) are high deductible plans that are often linked with a personal savings account. These plans are intended to engage consumers in health care decision making by providing significant financial incentives and information tools to help them make wise choices in their health care purchasing decisions. These plans are still relatively new and there are many unanswered questions concerning the effects these plans might have on consumer behavior.

Watson Wyatt is partnering with the RAND Corporation to investigate the effects of these new plans on health care health costs and quality. Specifically, the study will analyze medical care use and expenditure patterns as reported in the medical claims files for nearly 40 large employers over the 2003-2007 period. These employers offer a variety of CDHP plans, sometimes as the only health plan choice but usually as one of several choices. This study will examine how high deductibles, personal accounts and information support tools influence consumer behavior, and how these changes in consumer behavior influence cost and quality outcomes.

RAND and Watson Wyatt have received a multiyear grant from the California HealthCare Foundation and the Robert Wood Johnson Foundation to fund this work, and we are working with Thomson Medstat to compile and analyze the five-year medical claims database. Watson Wyatt and RAND have also interviewed participating employers about their implementation experience, and have summarized the findings in a research brief and slide deck that can be downloaded below:

• Research Brief: "The CDHP Implementation Experience with Large Employers," August 2007.
• Slide Deck with additional information: "The CDHP Implementation Experience"

Watson Wyatt and RAND are an excellent team to perform this work. Watson Wyatt brings to the team an inside knowledge of the employee health care industry, access to data, and a commitment to research. RAND Health is the nation’s most trusted source of objective health policy research. RAND performed the most important study of health care consumer behavior– the RAND Health Insurance Experiment –that to this day remains the largest health policy study in U.S. history. The current study will better inform all parties regarding CDHP effects on consumer behavior in the context of today’s health plans and delivery systems.

For more information, contact Roland McDevitt at (703) 258-7559 or Ryan Lore at (703) 258-7547.