High-Deductible Alarmism

Published March 26, 2015

Kaiser Health News is a pretty good source of information on what’s happening in the world of health care policy. That said, the general bent of the articles tend towards support for government-oriented rather than market-oriented policies. An article today raises the alarm over high-deductible plans, and it’s clear the writer has bought into the notion that asking people to pay directly for their health care is an oddity that is probably best avoided:

High-Deductible Plans Bring Lower Costs Now, But Will They Bring Pricey Problems?

Got a high-deductible health plan? The kind that doesn’t pay most medical bills until they exceed several thousand dollars? You’re a foot soldier who’s been drafted in the war against high health costs.

Companies that switch workers into high-deductible plans can reap enormous savings, consultants will tell you — and not just by making employees pay more. Total costs paid by everybody — employer, employee and insurance company — tend to fall in the first year or rise more slowly when consumers have more at stake at the health-care checkout counter whether or not they’re making medically wise choices.

Consumers with high deductibles sometimes skip procedures, think harder about getting treatment and shop for lower prices when they do seek care.

What nobody knows is whether such plans, also sold to individuals and families through the health law’s online exchanges, will backfire. If people choose not to have important preventive care and end up needing an expensive hospital stay years later as a result, everybody is worse off…

The writer does a good job of reviewing what the evidence actually shows, which is that there doesn’t seem to be much cause for concern, health costs don’t suddenly spike after a few years because everybody skipped the preventive treatment that supposedly would have detected conditions and treated them at a lower cost. But even going through the evidence the writer seems to focus on the fact that costs haven’t ballooned yet.

The fact is, most of what is called preventive care is not going to save money, and depending on what you’re talking about it could very well be a waste of money. Aside from vaccines, there is very little savings from preventive measures directed at the general population. An annual checkup for an outwardly healthy person with no serious risk factors, for example, has very little value.
Obamacare, of course, went whole-hog on the idea that preventive care was the key to saving money. Yet another misconception that promises to divert massive amounts of resources away from areas where it might actually do some good and instead fritter it away on low-value preventive care.