CDHC Plans Promote Good Health While Cutting Costs

November 29, 2006

     A new study adds considerable evidence that adopting consumer-directed health care plans is an effective way to increase healthy behavior while cutting wasteful spending, says an expert with the National Center for Policy Analysis (NCPA).  According to a brief of a 5-year global study released this week by Aon Consulting, consumer-driven health care plans have a significant positive impact on health care spending and quality, even over the long-term.

     "Adopting healthy habits and lifestyle changes can significantly impact overall health in the long-term," said Devon Herrick, Senior Fellow with the NCPA. "This evidence proves the right incentives have a positive impact on health care choices, now and in the future."

     Examining their full-replacement clients in South Africa, the United Kingdom and the United States, Aon found overwhelmingly positive results for plans incorporating healthy behavior promotion and wellness programs.

     The study found:

• CDHP patients changed their behaviors significantly when presented with incentives to improve.

• Chronic-care patients were still able to earn incentives and improve their health while saving on health costs.

• CDHP members consumed fewer health services without sacrificing needed care.

• Short-term cost-saving behaviors did not result in poor long-term ill effects.

     These results are consistent with research, previously published by the NCPA, on insurer Discovery Health's initial launch of CDHC plans in South Africa, noted Herrick.

     "These plans benefit from being well designed," continued Herrick. "They factor in wellness programs and provisions for chronic illnesses, as well as support tools for plan users. Setting up the health care system to support the patient leads to lowered costs, less spending and improved health. We really can build a health care system that benefits everyone who participates."

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