Not What the Doctor Ordered: Lessons From Physicians’ Low Uptake of High-Deductible Health Plans

Am J Accountable Care. 2021;9(1):20-23. https://doi.org/10.37765/ajac.2021.88685

One of the most significant evolutions in private health insurance in the 21st century has been the advent and proliferation of high-deductible health plans (HDHPs). These plans, which feature deductibles of at least $1400 for individual coverage and at least $2800 for family coverage before most services are covered, now constitute nearly half of all nonelderly Americans’ health insurance.¹ It is likely that growth in private health insurance deductibles will continue in the coming years as health care costs continue to rise and both employers and policy makers seek to limit growth in health insurance premiums.²

Some individuals who enroll in an HDHP do so because they have few viable options for health insurance, either because their employer offers only an HDHP or because they are unable to afford a more generous plan offered by their employer or on a health insurance exchange. However, many individuals who seek health insurance have a legitimate choice between enrolling in an HDHP and enrolling in a plan that has a lower deductible but might have more expensive premiums. Historically, when individuals have had choices between enrolling in an HDHP and enrolling in another type of health plan, those who are healthier and therefore may anticipate less need for health care have been more likely than others to choose the HDHP.^3-6 Beyond health status and needs for health care, it is also possible that HDHPs could be more popular among individuals who are well positioned to summon the skills needed to effectively navigate the high cost sharing of HDHPs. Such skills include discerning when services are low value and could be forgone, identifying when services are high value and worth the associated out-of-pocket spending, having cost conversations with clinicians, and using price comparison tools in health care decision-making.⁷

Physicians are one group of individuals who may be particularly well positioned to be cost-conscious consumers of health care and therefore could be more likely to take up an HDHP when doing so would be financially advantageous. Consequently, it is notable that Abrahams et al report in this issue of The American Journal of Accountable Care^® that in 2018 nearly 9 in 10 physicians of a large health system who were offered an HDHP chose an alternative health plan, even though this alternative plan would cost $1451 to $3851 more in premium and out-of-pocket costs than the HDHP.⁸ As with many policy-relevant studies, this research provokes more questions than it answers. First and foremost, why did so few physicians take up the HDHP option, even though it would have been financially advantageous for them to do so? How does this low uptake compare with uptake of the HDHP option among nonphysician employees? What can this study tell us about how HDHPs could be more attractive to, and ultimately work better for, individuals who enroll in them?

There are a number of potential explanations for why so many physicians chose a plan that was financially “dominated” (ie, more expensive at any level of health care utilization). These potential explanations should not only motivate future research but also be carefully considered by employers and policy makers who strive to help individuals choose health plans that will best suit their needs and preferences. First, the field of behavioral economics has offered important insights into how the environment in which individuals make decisions—even consequential ones such as the choice of a health insurance plan—can lead to choices that deviate from one’s true preferences. For example, in some situations, too many options can make choices more difficult and lead to unintended consequences.^9,10 The physicians in this study had a choice of just 3 health plans. Thus, it is unlikely that “choice overload” may have adversely affected their decisions. Beyond the number of health plan options, however, it is unclear how these options were presented to employees and whether the order of options or the information surrounding them could have influenced plan choice. In the future, employers and policy makers should carefully design the environments and processes through which health plans are chosen to maximize the extent to which plan choices reflect underlying preferences rather than the characteristics of choice environments.¹¹

Second, because the study presented only data on the plan choices of physicians, it is unclear how the uptake of HDHPs among physicians in this particular workplace compared with HDHP uptake among other subgroups of employees. Although physicians in general may be relatively better positioned than others to be well-informed health care consumers, their decision-making can be distorted by the same factors that can affect other people’s choices, such as low numeracy.^12,13 Further, some research has suggested that physicians may be comparatively averse to potential financial losses,¹⁴ as might be experienced when an individual has a need for expensive medical care that consumes an entire deductible. In light of these considerations, it is perhaps not so surprising that many physicians would choose a “dominated” plan, as is common in other populations.^15,16 To better elucidate whether these and other factors could explain the findings of Abrahams et al, future studies should use mixed methods to examine the drivers of health plan choices and how these drivers vary across individuals.

Third, by virtue of their roles in health care, physicians may be not only better positioned than others to be informed health care consumers in HDHPs, but also well situated to understand the current shortcomings of these plans. For example, at this point it is likely that many practicing physicians have witnessed that HDHPs can lead patients to forgo needed health care services¹⁷ such as high-priority office visits¹⁸ and long-term medications.¹⁹ These reductions in necessary health care services can be even greater for HDHP enrollees with chronic health conditions,^20,21 who also face high financial burdens in these plans.^22,23

In addition, although HDHPs seek to encourage enrollees to be cost-conscious health care consumers, at present it can often be difficult for even the most well-informed, highly motivated individuals to successfully engage in the consumer behaviors that these plans call for. Although many plans offer price comparison tools to support consumer decision-making,²⁴ the utility of publicly reported information about health care prices can be variable.²⁵ Further, only about half of HDHP enrollees who report having saved for health care, compared prices for services, or talked with clinicians about health care costs feel that doing so helped them better access needed care or pay less for services.⁷

Recent federal policy developments have the potential to address some of the difficulties that HDHP enrollees face in affording needed health care, and help them be more effective health care consumers. On July 17, 2019, the Internal Revenue Service and the US Department of the Treasury issued guidance that permits HDHPs to exempt certain services for chronic conditions from deductibles and still be eligible for linkage to a health savings account (HSA).²⁶ This is a critically important policy change, as it gives HSA-eligible HDHPs more flexibility in exempting selected high-value services from deductibles. As of January 1, 2021, hospitals are now required to publicly report negotiated prices for services, including 300 services that have been deemed “shoppable.”²⁷ Starting on January 1, 2023, health plans will be required to report negotiated prices to their members and provide personalized estimates of their out-of-pocket costs for 500 “shoppable” services.²⁸ These 2 most recent regulatory changes have the potential to make health care prices more consistently available to HDHP enrollees. It will be important for future studies to track the extent to which these policy changes, taken together, affect uptake of HDHPs and outcomes in these plans.

Absent additional federal policy reforms, HDHPs are likely to soon become the most common private health insurance benefit design. The findings of Abrahams et al that few physicians took up an HDHP, even when doing so could have saved them thousands of dollars, point to the need to better understand the factors that influence choice of HDHPs, as well as to optimize the health and financial outcomes of the growing number of individuals who are enrolled in these plans.

Author Affiliations: VA Center for Clinical Management Research, VA Ann Arbor Healthcare System, Ann Arbor, MI; Department of Internal Medicine, University of Michigan Medical School, Ann Arbor, MI; Department of Health Management and Policy, University of Michigan School of Public Health, Ann Arbor, MI; University of Michigan Institute for Healthcare Policy and Innovation,Ann Arbor, MI.

Source of Funding: Support was provided by the Health Services Research and Development Service, Veterans Health Administration, Department of Veterans Affairs. The views expressed in this article are those of the author and do not necessarily reflect the position or policy of the Department of Veterans Affairs or the United States government. The funding source had no role in the design and conduct of the study; collection, management, analysis, and interpretation of the data; preparation, review, or approval of the manuscript; and decision to submit the manuscript for publication.

Author Disclosures: Dr Kullgren has received consulting fees from SeeChange Health, HealthMine, and the Kaiser Permanente Washington Health Research Institute; and honoraria from the Robert Wood Johnson Foundation, AbilTo Inc, the Kansas City Area Life Sciences Institute, and the American Diabetes Association.

Authorship Information: Concept and design; drafting of the manuscript; critical revision of the manuscript for important intellectual content; and administrative, technical, or logistic support.

Send Correspondence to: Jeffrey T. Kullgren, MD, MS, MPH, VA Center for Clinical Management Research, VA Ann Arbor Healthcare System, PO Box 130170, Ann Arbor, MI 48113-0170. Email: jkullgre@med.umich.edu.

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