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Keywords:

  • Employer-sponsored health insurance;
  • health reimbursement arrangement;
  • cost sharing

Objective. To conduct site visits to study the early experiences of firms offering consumer-driven health care (CDHC) plans to their employees and firms that provide CDHC products.

Data Sources/Study Setting. A convenience sample of three firms offering CDHC products to their employees, one of which is also a large insurer, and one firm offering an early CDHC product to employers.

Study Design. We conducted onsite interviews of four companies during the spring and summer of 2003. These four cases were not selected randomly. We contacted organizations that already had a consumer-driven plan in place by January 2002 so as to provide a complete year's worth of experience with CDHC.

Principal Findings. The experience of the companies we visited indicated that favorable selection tends to result when a CDHC plan is introduced alongside traditional preferred provider organization (PPO) and health maintenance organization (HMO) plan offerings. Two sites demonstrated substantial cost-savings. Our case studies also indicate that the more mundane aspects of health care benefits are still crucial under CDHC. The size of the provider network accessible through the CDHC plan was critical, as was the role of premium contributions in the benefit design. Also, companies highlighted the importance of educating employees about new CDHC products: employees who understood the product were more likely to enroll.

Conclusions. Our site visits suggest the peril (risk selection) and the promise (cost savings) of CDHC. At this point there is still far more that we do not know about CDHC than we do know. Little is known about the extent to which CDHC changes people's behavior, the extent to which quality of care is affected by CDHC, and whether web-based information and tools actually make patients become better consumers.