Congressional Newsletter
Updates to Congress on RAND's work in health policy


High-Deductible Health Plans Cut Costs but Also Reduce Preventive Care

a doctor with her worried patient

High-deductible health plans are an increasingly popular approach to cutting health care costs. These plans--or a variant known as consumer-directed health plans, which combine a high deductible with a tax-advantaged health account--are offered by more than 50 percent of large employers in the United States. Yet, despite growing enrollment in these plans, little is known about how they affect health care spending or the use of services. A team led by RAND Health researcher Amelia Haviland conducted the largest study of high-deductible health plans to date. The team examined the experiences of more than 800,000 families insured during 2004 and 2005 through one of 53 large employers, about half of which offered a high-deductible or consumer-directed plan.

The team found that in the first year of enrollment, high-deductible plans significantly reduced health care spending but also led consumers to cut back on preventive care. Cost savings were significant only for enrollees in plans with a deductible of at least $1,000 per person. Results also showed that as families reduced medical spending, they eliminated some beneficial care. Childhood vaccination rates, for example, dropped among families with high-deductible plans, while they increased among families with traditional health plans. Rates of mammography, cervical cancer screening, and colorectal cancer screening also fell among those with high-deductible health plans relative to those with traditional plans. These decreases occurred even though high-deductible plans waive deductibles and copayments for such care.

These results suggest that policymakers and health plans should consider additional ways to promote preventive service use. The federal Patient Protection and Affordable Care Act requires health plans to waive deductibles for preventive treatments. This information needs to be clearly communicated so that Americans increase their use of preventive care.

READ THE RESEARCH BRIEF: High-Deductible Health Plans Cut Spending but Also Reduce Preventive Care

New Approaches to Cost Containment Will Heighten the Need for Quality Measurement

a stethoscope and chart

According to critics, the traditional fee-for-service model--in which health providers are rewarded when they provide more care--encourages unnecessary spending without enhancing quality or efficiency. Now, the fee-for-service model is being challenged by reforms that alter payment methods in order to limit costs. Many of these approaches stress paying for quality rather than quantity in health services. The Patient Protection and Affordable Care Act has given added momentum to payment reforms that can simultaneously contain costs and improve health care quality.

A recent RAND Health study concluded that these payment reform efforts will require significant advances in quality measurement so that reforms improve medical care and do not harm patients. The study examined 90 payment reform programs and identified 11 general models of payment reform that reward providers for delivering better-quality, cost-conscious care or else pay health care providers a fixed amount to coordinate treatment of an illness, such as diabetes.

The researchers identified four priority areas for development and refinement of health care quality measures: (1) health outcome measures to assess the health status of populations, including patients' quality of life and safety outcomes; (2) quality measures to examine coordination of care among health providers; (3) programs to assess the participation of patients and their caregivers in medical care; and (4) measures to assess the structure of health systems, particularly those designed to respond to the new payment models. Items to be assessed should include the quality of care management and the use and functionality of electronic health records.

The researchers also stress that efforts are necessary to ensure that payment reforms do not increase disparities in health care. Measures for this purpose would include monitoring access to care and detecting whether providers are turning away high-risk or medically complicated patients.

READ MORE: Investment in New Health Care Quality Measures Needed as Cost-Cutting Strategies Grow

Will Electronic Health Records Improve Quality of Care in Hospitals?

a doctor looking at a computer

It is widely assumed that adoption of electronic health records (EHRs) will improve the efficiency and quality of medical care. Based on this premise, the Health Information Technology for Economic and Clinical Health Act of 2009 included funds to stimulate adoption of EHRs and other health information technology. Approximately $30 billion in Medicare and Medicaid incentives will be paid out over the life of the program, mostly to hospitals that can demonstrate "meaningful use" of EHRs. What does the evidence show about the effect of EHRs on hospital quality of care?

To address this question, a team from RAND Health examined extensive data on EHR adoption, hospital characteristics, and quality in nearly 2,100 hospitals. The analysis focused on processes of care for three common conditions: acute myocardial infarction (heart attack), chronic heart failure, and pneumonia.

The study's results were mixed. On one hand, quality scores for heart failure improved more significantly in hospitals that maintained a basic EHR system compared with hospitals that had no EHR system. On the other hand, quality scores for heart attack and heart failure improved less in hospitals that had recently adopted or upgraded to an advanced EHR system compared with hospitals that maintained the status quo. New adoption of a basic EHR system did not significantly improve quality of care for any of the conditions studied.

The researchers theorize that the counterintuitive findings showing greater improvement for hospitals with existing, basic EHR systems may be explained by the complex nature of hospital work environments. Given this complexity, introducing new technology into an already complex environment may trigger various unintended effects that undermine or outweigh the potential benefits of the new technology. The researchers conclude that better metrics for assessing what constitutes "meaningful use" should help future studies identify which elements of EHRs have the greatest effect on quality of care.

READ THE RESEARCH BRIEF: Will Adoption of Electronic Health Records Improve Quality in U.S. Hospitals?

Most-Viewed Research Paper in Health Affairs Authored by RAND Researchers

A research paper by RAND researcher Richard Hillestad and co-authors on the potential benefits of health information technology adoption was the most-viewed research paper in 2010 in the Health Affairs archives. The archives span 29 years. The paper, "Can Electronic Medical Record Systems Transform Health Care? Potential Health Benefits, Savings, and Costs," was published in a special Health Affairs supplement in 2005.

READ THE RESEARCH BRIEF: Health Information Technology: Can HIT Lower Costs and Improve Quality?


Amelia Haviland

Amelia Haviland

Amelia Haviland, Ph.D. is a statistician at RAND. Her research focuses on quality measurement, causal analysis with observational data, and analysis of longitudinal and complex survey data applied to health, economic, and crime outcomes. Examples of her recent work include evaluating the effects of high-deductible health insurance on costs and use, evaluating the Agency for Healthcare Research and Quality's Patient Safety Initiative, and estimating immunization disparities for Hispanic seniors. Haviland is currently assessing quality measures for Medicare Advantage and Special Needs Plans and exploring the connections between patient safety measures and recent reductions in medical malpractice claims.

Read more about Amelia Haviland »


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Winfield Boerckel
Director, Office of Congressional Relations

Jesseca Boyer
Health Legislative Analyst

RAND Office of Congressional Relations
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