Center for American Progress

Consumer-Driven Health Plans May Preempt, Not Promote, Prevention

Consumer-Driven Health Plans May Preempt, Not Promote, Prevention

Prioritizing prevention is critical to health reform, but consumer-driven plans are not the answer to promoting prevention.


Consumer-Driven Health Plans Prevent Prevention

By Jeanne Lambrew

The biggest threat to the nation’s health is not avian flu, AIDS, or bioterrorism. It is preventable, chronic disease. Roughly 70 percent of health costs and deaths are attributable to smoking, obesity, and health problems that could be prevented.

Most Americans do not know about or value prevention. One out of five diabetics and one out of three hypertensives are unaware of their condition. Those that do know what they should do often skip treatments or steps to improved health. Prevention’s perceived value is low since its potential benefits are distant.

The answer, according to conservatives, is increased individual “ownership” of health care dollars. Our failure to promote prevention, they reason, lies in government mandates and over-insurance that de-emphasize personal responsibility. Why diet when insurance pays for gastric bypass surgery? Why exercise when you can take a pill to lower your blood pressure? When people can be treated for any problem with first-dollar coverage, goes the reasoning, they may not prevent those problems in the first place. As one conservative says, the incentives are upside down. Therefore, if individuals reap the financial as well as the health rewards of prevention, they may be motivated to action. In policy terms, this means replacing traditional insurance with health savings accounts linked to high-deductible health plans.

Problem is, this “solution” has not seemed to work in reality. Information provided to enrollees in these consumer-driven health plans is infrequent and inadequate to help consumers make smart decisions.

Even Americans who know about preventive medicine tend to use it less when it costs them money. One study showed that even $10 co-pays caused a significant reduction in the use of mammograms among seniors. This is why effective health insurance plans often make prevention free or linked with some monetary benefit.

High deductibles also appear to harm efforts designed to forestall or prevent complications of an established disease as well: People with arthritis, heart disease, high cholesterol, and asthma were two to three times as likely to not fill a prescription due to cost when enrolled in a high-deductible plan versus a traditional insurance plan.

Even the insurance industry doesn’t stand behind the belief that consumer-driven health plans drive improved prevention. It recently issued a report focusing entirely on how high-deductible health plans are increasingly waiving deductibles for preventive care. This is more than an exception to the rule: It repudiates the theory behind these plans.

There is a better way. Prioritizing prevention means paying for services wherever, whenever, and for whoever needs it. It means investing in communities, schools, and workplace wellness efforts. And it means moving beyond private insurance as the sole solution: those companies simply have no incentive to invest in prevention today that benefits others later.

For additional reading:

Elise Gould, “Consumer-Driven Health Care is a False Promise,” Economic Policy Institute, October 11, 2006.

Marjorie Ginsberg, “Rearranging The Deck Chairs: Consumer-directed health care confronts the problems of health insurance,” Health Affairs- Web Exclusive, October 24, 2006.

James C. Robinson, Ph.D., “Health Savings Accounts — The Ownership Society in Health Care,” New England Journal of Medicine, September 22, 2005.

Jeanne Lambrew and John Podesta, “Commentary: The Wellness Trust,”, September 4, 2007.


Background Basics on Prevention

What is Prevention? In the United States, more than 125 million people suffer from a chronic disease such as hypertension, heart disease, cancer, or diabetes. Many people also suffer from acute diseases that can be prevented through vaccination or other means (e.g., daily aspirin use to prevent heart attacks). Preventive medicine attempts to reach these individuals before they become patients or develop disease complications. There are three levels of preventive medicine:

  • Primary prevention is focused on preventing the actual occurrence of a disease or injury (immunization against measles or influenza, for example)
  • Secondary prevention identifies those with significant risk factors for particular diseases, such as cancer, hypertension, or diabetes, and helps them manage their future health
  • Tertiary prevention provides care for those with an established disease to prevent or forestall progression and complications (treating high blood pressure before it leads to stroke, or diabetes before someone develops cardiovascular or kidney disease, for example).

Prevention measures can be performed in a clinical setting or undertaken by the larger community. Clinical prevention includes services performed by medical professionals—mammograms, colonoscopies, and cholesterol screenings, to name a few. Community prevention extends to population-based services to limit disease, injury, or disability—measures such as efforts to build playgrounds and bike paths to promote physical activity, and tobacco taxes and use restrictions to reduce smoking.

The National Commission on Prevention Priorities ranks clinical prevention services based on cost and health effectiveness. Their results have led to a core list of recommended preventive services (see Table).

prevention chart

Studies have found that targeted prevention can reduce costs and save lives. Effective control of hypertension among seniors, for example, could save Medicare $890 billion over 25 years.

Prevention is Not Well Understood in the Population. According to the Centers for Disease Control and Prevention, one dollar out of every five spent on health care goes toward treating the 21 million Americans who have diabetes, and often for those with later stage complications. Yet well over a quarter of those who suffer from diabetes are unaware of their condition. Another 54 million Americans are at risk of developing diabetes due to high blood sugar levels. With the right preventive care, many of these people would not develop diabetes. Similarly, hypertension is the leading reason for office visits to physicians, but almost one in three Americans with hypertension lives in the dark about their condition. Many more individuals are unaware of their specific health risks. By helping people identify risk factors early on, preventive care can reduce costs and improve health outcomes for millions of people in the long term.

Health System Places Low Priority on Prevention. The medical field has long focused on diagnosing and treating disease, rather than preventing it. Only three percent of national health spending is dedicated to prevention. The journal Preventive Medicine published a study concluding that the low use of screening tools for colorectal cancer was due not to low patient acceptance, but to a lack of provider counseling. A Commonwealth Fund international health policy study found that only 48 percent of adult patients in the United States received advice on weight, nutrition, or exercise, compared with 72 percent in the United Kingdom.

America’s health system is also steadily losing family practice doctors and other professionals trained to provide preventive care. Between 1949 and 1995, the number of primary care physicians fell from 59 percent to 37 percent. Compounding this problem, the number of medical students choosing primary care residencies has dropped 50 percent from 1997 to 2005.

Together these factors cripple the ability of modern medicine to target high-risk patients, follow up with accurate and timely information, ensure patient adherence to treatment regimens, or provide the time-intensive, one-on-one service delivery that may be needed.

Costs Limit Prevention. There is also substantial evidence of financial barriers to prevention. The Commonwealth Fund found in 2004 that high out-of-pocket costs are causing patients to forgo essential health care services, and to skimp on preventive care. Furthermore, a study conducted by the New England Journal of Medicine found that having even a minimal co-pay of $10 to $20 in Medicare managed-care plans convinced 8 percent of women to discontinue their screening mammograms, an important preventive tool for breast cancer. Additional cost-sharing required under consumer-driven health plans could deter even more people from seeking preventive care.

For additional reading:

Centers for Disease Control and Prevention, Chronic Disease Prevention website.

Partnership for Prevention, “Preventive Care: National Profile on Use, Disparities, and Health Benefits Washington, DC: Partnership for Prevention, 2007).

Karen Davis, “Will Consumer-Directed Health Care Improve System Performance,” (New York: The Commonwealth Fund, 2004).

Thomas H. Lee, M.D., and Kinga Zapert, Ph.D., “Do High-Deductible Health Plans Threaten Quality of Care?New England Journal of Medicine, September 22, 2005.

Point-Counterpoint: Is Prevention Encouraged Under Consumer-Driven Health Plans?




The Bottom Line

Under consumer-driven health plans (CDHPs), patients take responsibility for their health and health care costs by using preventive services and avoiding costly treatments.

The risk of illness or health complications is multi-factorial and many issues fall outside the realm of individual choice.


The idea that

CDHPs lead consumers to choose cost-effective providers and services in the form of preventive care is based on faulty assumptions that consumers can obtain adequate and reliable information on cost and quality and that they can differentiate necessary from unnecessary care.

Furthermore, consumer-driven health care theory over-simplifies the notion of prevention. While on the whole preventive measures reduce the risk of certain health complications, other factors such as socioeconomic status, genetic predisposition, income, education, and environmental issues predispose individuals to illnesses which are largely beyond their control.

Health savings accounts in consumer-driven health plans are sufficient to encourage use of preventive services.


Even small co-pays associated with consumer-driven health plans can discourage people from using preventive services.


CDHPs are permitted, but not required, to cover preventive services outside of the deductible. In a number of these plans, recommended preventive services must be financed through the accounts, sometimes at a considerable cost to the consumer.

Studies suggest that cost-sharing (co-pays or coinsurance), especially for low-income families, people with chronic diseases, or families with children with special needs, could deter patients from seeking preventive services, leading to possible disparities in health outcomes.

Although employers are allowed to make contributions to health savings accounts, a 2007 survey shows that employers contribute less to HSA-qualified plans compared with other types of plans, shifting higher out-of-pocket expenses to workers which could further deter workers from seeking preventive care.

Consumer-driven health plans promote preventive services through free-market mechanisms, personal choice,and responsibility.


The fact that some consumer-driven health plans “carve-out”preventive services undermines the theory that free-market mechanisms encourage their use.


Although evidence is still mixed, some studies show that consumers left to free-market devices will choose to under-invest in prevention in an attempt to be more “cost-conscious”—unless preventive services are free.

Currently some consumer-driven health plans incorporate financial or wellness incentives to promote wise health care choices, further proving that free market forces alone are insufficient to encourage prevention.

In the News

A new poll sponsored by Erickson Health shows that 82 percent of voters say Americans don’t do enough to protect their health and prevent disease. The same poll found that the same percentage (82 percent) of Americans are not taking the affordable, simple steps that would do so. Read more.

A new study shows how health costs are eroding family income. A Washington Post article highlights a worker who rejected a health savings account because it doesn’t cover prevention, staying married to keep traditional health insurance. Read more.

Shannon Brownlee, author of Overtreated: Why Too Much Medicine is Making Us Sicker and Poorer, recently outlined her criticisms of consumer-driven health plans, including cost shifting and failure to take into account that consumers indiscriminately cut down on care. Read more.

NPR profiled a New Hampshire consumer-driven health plan and the obstacles it – and its enrollees – face. Hear more.


The Last Word

“Patients with HSAs may be reluctant to seek a diagnosis that could lead to high medical costs. ‘You have people sitting on their symptoms because they know they’re going to have a huge expense,’ said Ann Donovan, administrator for Heartland Hematology Oncology Associates in Kansas City, MO.”

The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. A full list of supporters is available here. American Progress would like to acknowledge the many generous supporters who make our work possible.