Three ways high-deductible plans foster value

September 21, 2015

Christopher Kerns, MBA, managing director, Research and Insights, The Advisory Board Company, believes high-deductible health plans (HDHPs) will help foster high-value healthcare.

Christopher Kerns, MBA, managing director, Research and Insights, The Advisory Board Company, believes high-deductible health plans (HDHPs) will help foster high-value healthcare. Here are three reasons why:

1. HDHPs will create a greater incentive for providers to increase the quality of care, says Kerns.

“This is because when patients have the incentive to shop for care, they are going to seek out value (i.e., high quality, low cost),” he says, noting that this is already evident in outpatient imaging. “The consumer quest for value in healthcare will only increase with greater price transparency.”

2. Providers know they have to streamline costs in order to be price competitive for patients who shop around, says Kerns.

“That means minimizing clinical variation and standardizing care protocols around best-in-class care [where possible], both of which have been shown to reduce costs and improve quality,” he says. “This is no different from other industries in which competition forces businesses to simultaneously improve the quality of their products and keep prices competitive.”

3. Providers must also find a low-cost means of managing chronically ill patients so they don’t forego care and end up with a preventable admission, says Kerns.

“This is why low-cost, consumer-oriented assets are a critical component to any health network,” he says. “Hospital care is the most expensive kind of care; more health systems need a greater footprint in ambulatory clinics, easy-access primary care, and low-cost care management. These assets help to reduce the costs to all purchasers, payers, and patients alike, minimizing the incentive for patients to eschew necessary care, and reducing the number of preventable admissions.”

Kerns doesn’t foresee an inherent conflict between HDHPs and value-based reimbursement. “It’s quite conceivable for patients to purchase an HDHP that is attached to a narrow network (an accountable care organization [ACO], for example), that itself has incentives to reduce costs of care across a population of patients,” he says. The HDHP simply creates a greater financial obligation for any care actually incurred.