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High-Deductible Health Plans and Better Benefit Design

Anish P. Mahajan, MD, MPH; and Robert H. Brook, MD, ScD
[+] Article, Author, and Disclosure Information

From The Robert Wood Johnson Clinical Scholars Program, David Geffen School of Medicine at University of California, Los Angeles, Los Angeles, CA 90024, and RAND Corporation, Santa Monica, CA 90407.

Potential Financial Conflicts of Interest: Dr. Brook's wife, Dr. Jacqueline Kosecoff, is CEO of Prescription Solutions.

Requests for Single Reprints: Robert H. Brook, MD, ScD, The RAND Corporation, 1700 Main Street, Santa Monica, CA 90407; e-mail, robert_brook@rand.org.

Current Author Addresses: Dr. Mahajan: Robert Wood Johnson Clinical Scholars Program, 911 Broxton Avenue, Suite 314, Los Angeles, CA 90024.

Dr. Brook: The RAND Corporation, 1700 Main Street, Santa Monica, CA 90407.

Ann Intern Med. 2008;148(9):704-706. doi:10.7326/0003-4819-148-9-200805060-00011
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High-deductible health plans are growing in policy and market prominence. These plans offer lower premiums than conventional insurance products but make enrollees pay high deductibles (the amount that a person must pay out-of-pocket before their health insurance plan pays benefits) for most types of care, including emergency department use, inpatient hospital services, diagnostic testing, and pharmaceuticals. Average deductibles in high-deductible health plans range from $1600 to $1900 for individuals and $3300 to $3900 for families. In 2007, approximately 10% of employers offered high-deductible health plans, and such plans covered about 3.8 million workers (1). By shifting more of the cost of care to individuals, advocates of high-deductible health plans believe that consumers will more carefully assess the balance of benefits versus costs of their health care choices, ultimately improving the efficiency and quality of care.

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Protecting the Medical Commons
Posted on May 23, 2008
Robert H Fletcher
Harvard Medical School and Harvard Pilgrim Health Care
Conflict of Interest: None Declared

Rapid Response Annals of Internal Medicine

In response to:

Mahajan AP, Brook RH. High-deductible health plans and better benefit design. Ann Intern Med 2008;148:704-706.

Wharam JF, Galbraith AA, Kleinman KP, Soumerai SB, Ross-Degnan D, Landon BE. Cancer screening before and after switching to a high- deductible health plan. Ann Intern Med 2008;148:647-655.

Wharam et al. reported that a high-deductible insurance plan providing first-dollar coverage for fecal occult blood tests (FOBTs) but not colonoscopies did not change colorectal cancer screening rates but did result in somewhat higher use of FOBTs and lower use of colonoscopies (1). The article and accompanying editorial (2) imply that it might be unsound to cover FOBT but not colonoscopy. However, clinical practice guidelines at the time of the study recommended both tests. Neither was considered unequivocally superior, although they differed in characteristics that might matter to individual patients. It is only in very recent guidelines that colonoscopy and other structural examinations of the colon were judged preferable to stool tests because they are better able to detect adenomas and so prevent cancer.

In the editorial, Mahajan and Brook wonder whether HPHC gave careful consideration to the consequences of providing first-dollar coverage for FOBT, the less expensive test, but not colonoscopy. Since 1996 an Ethics Advisory Group has advised HPHC on ethical issues, including tough allocation decisions, confronting contemporary health plans (3). Two dozen participants represent a range of stake-holders such as HPHC staff, community physicians, consumers, purchasers, and ethicists. At a time of national backlash against insurer and physician led managed care, the Group was asked to explore the ethical dimensions of insurance that was more affordable and included deductibles that encouraged greater consumer participation in their own health care decisions. The Group devoted six meetings to these issues and did take into account research evidence of test effectiveness as well as evidence that in some settings deductibles reduce care without regard to its effectiveness. HPHC also encouraged studies of the effects of its policies and the Wharam study is one result.

We agree that it would be wonderful if "patient cost-sharing were not needed to control costs and patients and physicians instead worked together to eliminate waste and equivocal "¦ or ineffective services." But the cost of heath care is an urgent, practical problem with widespread effects. For example, Emmanuel has argued that cost is the underlying cause of so many uninsured Americans (4). So pipe dreams are not enough. HPHC believes that one of its most important obligations is "protecting the medical commons"(5). Should we not applaud, rather than criticize, efforts to live with less expensive care at a time when there was not evidence-based consensus that more expensive care produces better outcomes?

Robert H. Fletcher, MD, MSc. James E. Sabin, MD Joseph Dorsey, MD

Harvard Medical School and Harvard Pilgrim Health Care

Corresponding author: Robert H. Fletcher, M.D., M.Sc. 208 Boulder Bluff Chapel Hill, NC 27516 919 929-4629 Robert_Fletcher@hms.harvard.edu


1. Wharam JF, Galbraith AA, Kleinman KP, Soumerai SB, Ross-Degnan D, Landon BE. Cancer screening before and after switching to a high- deductible health plan. Ann Intern Med 2008;148:647-655.

2. Mahajan AP, Brook RH. High-deductible health plans and better benefit design. Ann Intern Med 2008;148:704-6.

3. Sabin JE, Cochran D. Confronting trade-offs in health care: Harvard Pilgrim Health Care's Organizational Ethics Program. Health Affairs 2007;26:1129-1134.

4. Emanuel EJ. The cost-coverage trade-off. "It's the health care costs, stupid." JAMA 2008;299:947-9.

5. Hiatt HH. Protecting the medical commons: Who is responsible? N Engl J Med 1975;293:235-241.

Conflict of Interest:

The authors are affiliated with Harvard Pilgrim Health Care, whose policies were studied (in the article) and commented on (in the editorial)

Protecting Patients as well as the Medical Commons
Posted on June 19, 2008
Anish P Mahajan
Robert Wood Johnson Clinical Scholars Program, David Geffen School of Medicine at UCLA
Conflict of Interest: None Declared

In response to:

Fletcher RH, Sabin JE, Dorsey J. Protecting the medical commons. Rapid response. Annals Intern Med 2008.

We thank Fletcher and colleagues for their thoughtful letter describing Harvard Pilgrim Health Care's (HPHC) decision-making process and rationale for providing first dollar coverage of fecal occult blood testing (FOBT), but not colonoscopy, in their high deductible health plan. HPHC's Ethics Advisory Group, which engages a range of stakeholders, is laudable.

In their letter, Fletcher and colleagues defend HPHC's decision to provide first dollar coverage for FOBT but not colonoscopy by citing evidence based guidelines, from the time when the coverage decision was made, that regarded the two screening interventions as equally effective. In light of new consensus guidelines recommending colonoscopy over FOBT based on the added benefit of early detection and removal of polyps (1), we reviewed the high deductible health plan information available to potential enrollees on HPHC's website and found that colonoscopy is still subject to the deductible (2). Given the plan's goal to design benefits in a way that encourages the use of high value preventative services, we hope that HPHC is in the process of changing their high deductible health plan policy to provide first dollar coverage for colonoscopy.

Citing the need to control rising health care costs, Fletcher and colleagues justify the use of cost sharing to promote use of less expensive care that produces outcomes equivalent to outcomes of more expensive care. Although "protecting the medical commons" is indeed an important obligation that we share, it is not clear from existing evidence that an isolated focus on promoting preventative screening will achieve significant cost reductions in the long run. HPHC's high deductible health plan does not provide first dollar coverage for highly effective care such as prescription medications for chronic disease (2); increased cost sharing for medications reduces their use for such conditions as hypertension, diabetes, asthma, and depression (3). In addition, cost sharing reduces the use of clinically effective services and less or ineffective services in roughly equal proportions (4). If HPHC is interested in protecting the medical commons, wouldn't it be better to first attempt to eliminate wasteful and inappropriate care (care in which risks to the patient exceed the potential benefit) (5) by implementing appropriateness criteria and methods (4,5) and systematically educating their providers and enrollees in how to use the criteria rather than resorting to a cost-sharing policy that will adversely affect the well- being of some patients?

Anish P. Mahajan, MD, MPH* & Robert H. Brook, MD, ScD.*^

*Robert Wood Johnson Clinical Scholars Program, David Geffen School of Medicine at University of California, Los Angeles, CA 90024.

^RAND Corporation, Santa Monica, CA 90407.


1. Levin B, Lieberman DA, McFarland B, et al. Screening and surveillance for the early detection of colorectal cancer and adenomatous polyps, 2008: a joint guideline from the American Cancer Society, the US Multi-Society Task Force on Colorectal Cancer, and the American College of Radiology. CA Cancer J Clin 2008 (published online before print March 5, 2008).

2. Harvard Pilgrim Health Care. Six Facts About the HPHC Insurance Company Best Buy HSA PPO "“ Massachusetts. Available at: https://www.harvardpilgrim.org/pls/portal/docs/PAGE/MEMBERS/COVERAGE/BESTBUYHSAPPO/CC2389_MA_PRE.PDF. Accessed June 14, 2008.

3. Goldman DP, Joyce GF, Escarce JJ et al. Pharmacy benefits and the use of drugs by the chronically ill. JAMA 2004;291:2344-50.

4. Newhouse JP and the Insurance Experiment Group. Free for All? Lessons from the RAND Health Insurance Experiment. Harvard University Press, Cambridge, MA, 1993.

5. Schuster MA, McGlynn EA, Brook RH. How good is the quality of health care in the United States? 1998. Millbank Q 2005;83:843-895.

Conflict of Interest:

Dr. Brook's wife, Dr. Jacqueline Kosecoff, is CEO of Prescription Solutions.

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