August 26, 2009
By Beverly Gossage
UnitedHealthcare released a new study today that shows that HSAs continue to have a positive impact on reducing health care costs in the second year of enrollment. Here are the details:
Study Reveals HSA Plan Effects on Cost and Utilization
The latest UnitedHealthcare study is among the first to examine the impact of plans eligible for health savings accounts (HSAs) on health care costs and utilization among both large and small employers. Some highlights of the study:
- The positive impact of HSA plans continued through the second year of enrollment. This is meaningful because some first year differences in cost and use may have been attributable to a redistribution of elective care services as employees rushed to get care in the baseline year before an anticipated change in their benefits. This dynamic typically levels out in year two, providing a better view of consumer decision-making.
- Employers who implemented HSAs showed greater declines in hospital admissions and emergency room visits. At the same time, the number of prescriptions increased over time in the HSA. However, pharmacy costs decreased in the HSA population. This suggests that HSA members are making more prudent health care choices, such as using lower-cost drugs.
- Full replacement strategies appear to deepen the impact of HSA plans. When comparing cost and use across employers’ full populations (including traditional plan enrollees when the HSA was offered as an option), employers adopting a full replacement HSA had better cost results for both medical and pharmacy than employers offering an HSA option.
- The utilization analysis suggests that large full replacement employers realize lower costs due to a decrease in emergency room visits and lab usage. This highlights the possibility that full replacement members are making more appropriate use of emergency room and lab services.
The study results are consistent with other cross-sectional studies done by UnitedHealthcare on CDH plans. HSAs, especially those with a full replacement strategy, have great potential to slow the growth in health care costs compared to more traditional plans, even after adjusting for the better health found among those with an HSA. The study also confirms that we see a favorable impact for smaller companies.