Consumer-Directed Health Plans
and the Chronically Ill
h
Stephen T. Parente, Ph.D.
Jon Christianson, Ph.D.
Roger Feldman, Ph.D.
University of Minnesota
Sponsored by the Health Care Financing Organization of the Robert Wood
Johnson Foundation
Academy Health, June 29, 2009
Questions to Address
 How are Chronically ill CDHP-enrollees different
than non-CDHP enrollees?
 How does CDHP enrollee expenditures change
with respect to a chronic illness?
 Is there a different story for the chronically ill
when they face a CDHP full replacement?
Study Population from University of
Minnesota Employees, 2003 (AD)
HealthPartners Classic
Patient Choice Cost Group I
Patient Choice Cost Group II
Patient Choice Cost Group III
PreferredOne National
Definity Health Option 1
Definity Health Option 2
Employee-only Coverage
Less UM
Total Cost Contribution
$131.00
$131.00
$131.80
$131.00
$140.50
$131.00
$150.70
$131.00
$179.40
$131.00
$141.20
$131.00
$131.00
$131.00
HealthPartners Classic
Patient Choice Cost Group I
Patient Choice Cost Group II
Patient Choice Cost Group III
PreferredOne National
Definity Health Option 1
Definity Health Option 2
Family Coverage
Total Cost Less UM
Contribution
$327.50
$307.80
$329.60
$307.80
$351.30
$307.80
$376.80
$307.80
$448.40
$307.80
$353.00
$307.80
$327.50
$307.80
Employee
Contribution Enrollment
$ 0.00
5,069
$ 0.80
326
$ 9.50
533
$ 19.70
564
$ 48.40
375
$ 10.20
291
$ 0.00
182
Total 7,340
Employee
Contribution Enrollment
$ 19.70
4,179
$ 21.80
354
$ 43.50
718
$ 69.00
747
$140.60
335
$ 45.20
318
$ 19.70
138
Total 6,789
Single & Family Total 14,129
Plan Attributes from University of
Minnesota 2003 Choices
PLAN
CHARACTERISTIC
CDHP
HMO and PPOs
Employer HRA contribution
$750 single option
$1,500 family option
Not applicable
Deductible
$1,250 single option #1 None
$2,500 family option #1
$2,000 single option #2
$4,000 family option #2
None
$10-20 office visit co-pay
$200 inpatient co-pay (PPO)
$0 inpatient co-pay HMO
Same as other covered $10 generic
services
$20 formulary brand
$30 non-formulary brand
100% covered
100% covered
None, covered under
$400 person (HMO)
deductible structure.
$800 family (HMO)
$500 person (PPO)
$1,000 family (PPO)
Coinsurance/Co-pay
Rx coverage
Preventive Care
Stop-loss limit
Chronic Illness Enrollee Attributes by Plan Choice
Variable
Mean Values
Chronic Illness
All Enrollees CDHP Enrollees
Age in years**
No C hronic Illness
Enrollees in
Other Plans
50.96
52.81
48.8
45.34
0.52
0.42
0.65
0.56
$61.76
$74.38
$47.02
$52.03
Type of contract (family=1, else=0)**
0.56
0.57
0.54
0.44
Number of dependents**
2.28
2.25
2.31
1.78
Number of observations
362
195
167
659
Gender (female=1, male=0)
Salary (in ,000s of $)**
CDHP Chronic Illness Enrollee Experience with
Out of Pocket Cost Sharing – Single Contracts
Single Contract
Enrollees with Annual Spending
Exceeding Deductible
Prescription Drugs**
Physician Services*
Hospital
Enrollees with Annual Spending in the
Donut Hole
Prescription Drugs
Physician Services
Hospital
Enrollees with Annual Spending within
Savings Account Limit
Prescription Drugs
Physician Services
Hospital
* p<.05; ** p<.01, *** p<.001
Chronic Illness
No Chronic Illness
(n=62)
$2,638
$3,973
$2,621
(n=90)
$1,233
$2,865
$2,398
(n=11)
$ 484
$1,228
$ 190
(n=41)
$ 283
$ 758
$ 250
(n=9)
$ 83
$ 99
$ 32
(n=88)
$ 62
$ 167
$ 66
CDHP Chronic Illness Enrollee Experience with
Out of Pocket Cost Sharing – Family Contracts
Family Contract
Enrollees with Annual Spending
Exceeding Deductible
Prescription Drugs**
Physician Services
Hospital
Enrollees with Annual Spending in the
Donut Hole
Prescription Drugs
Physician Services
Hospital
Enrollees with Annual Spending within
Savings Account Limit
Prescription Drugs**
Physician Services
Hospital
* p<.05; ** p<.01, *** p<.001
Chronic Illness
No Chronic Illness
(n=84)
$4,364
$6,648
$4,827
(n=63)
$1,895
$5,947
$6,963
(n=18)
$ 656
$1,447
$ 578
(n=45)
$571
$1,535
$559
(n=4)
$548
$328
$123
(n=36)
$117
$458
$78
Full Replace Impact on Total $$
Total Expenditures
Intercept
Age (years)
Female=1, else 0
Baseline Chronic/Illness Count
Catastrophic Shock=1, else 0
Year 2=1, else Year 1
Later Sample=1, else 0
Firm 2=1, else 0
Firm 3=1, else 0
Firm 4=1, else 0
Firm 2 & Year 2 interaction
Firm 3 & Year 2 interaction
Firm 4 & Year 2 interaction
Enrollee is spouse=1, else 0
Enrollee is dependent=1, else 0
Second Year Impact
Firm 1
Firm 2
Firm 3
Firm 4
Adjusted R-Square
Coefficients
5.2453
0.0160
0.1351
0.3117
0.5976
0.0128
-0.0398
-0.2587
0.0753
-0.0674
-0.0539
0.0229
-0.0222
0.0617
-0.1523
T-Stat
273.76
38.89
16.66
175.66
62.68
1.39
-0.54
-19.61
0.97
-1.18
-2.91
0.28
-0.33
5.66
-10.03
Pr > |t|
<.0001
<.0001
<.0001
<.0001
<.0001
0.1657
0.5874
<.0001
0.3343
0.2369
0.0036
0.7815
0.7434
<.0001
<.0001
1.28%
-4.11%
3.57%
-0.94%
0.384
$$$ are logged for 2006 expenditures from 2005-2006 difference GLM
Full Replace Impact on Rx $$
Total Pharmacy Expenditures
Intercept
Age (years)
Female=1, else 0
Baseline Chronic / Illness Count
Catastrophic Shock=1, else 0
Year 2=1, else Year 1
Later Sample=1, else 0
Firm 2=1, else 0
Firm 3=1, else 0
Firm 4=1, else 0
Firm 2 & Year 2 interaction
Firm 3 & Year 2 interaction
Firm 4 & Year 2 interaction
Enrollee is spouse=1, else 0
Enrollee is dependent=1, else 0
Second Year Impact
Firm 1
Firm 2
Firm 3
Firm 4
Adjusted R-Square
Coefficients
3.3627
0.0376
0.0459
0.2296
-0.0966
0.0979
-0.1814
-0.4840
0.5472
-0.1162
-0.0580
-0.2972
-0.1121
-0.0091
0.2454
T-Stat
131.73
70.17
4.18
99.41
-7.69
7.97
-1.84
-26.94
5.24
-1.52
-2.29
-2.70
-1.23
-0.63
12.10
Pr > |t|
<.0001
<.0001
<.0001
<.0001
<.0001
<.0001
0.0658
<.0001
<.0001
0.1291
0.022
0.0069
0.2174
0.5257
<.0001
9.79%
3.99%
-19.93%
-1.42%
0.256
$$$ are logged for 2006 expenditures from 2005-2006 difference GLM
Summary
 How are Chronically ill CDHP-enrollees different than nonCDHP enrollees?
 Younger, wealthier with larger family size.
 How does CDHP enrollee expenditures change with respect
to a chronic illness?
 Significantly higher, usually by a factor of 2.
 Is there a different story for the chronically ill when they face
a CDHP full replacement?
 No. Just are higher for this group as well.
 Chronically ill patients have higher costs in CDHPs,
regardless of plan choice. Outcomes impact needs more
study.
CDHPs, Chronic Illness & Health Reform
Needs a new paradigm
(like I need a new
sweater)
A. Rewards in premium
reduction for active
management.
B. Consumers/providers
get the data to make
via web with results in
near real time.
C. Most majority reform
proposals hint ‘the
experiment is over.’