What Is Consumer Driven Care?

As many struggle to find the money to pay for increasingly expensive health insurance, some nontraditional concepts are beginning to attract a following. Among the most popular of these new plans is one known as consumer-driven health care. This type of plan leaves more choices up to the patient and lowers cost at the same time, providing a solution to the two biggest criticisms of most traditional plans.

Identification

• Consumer-driven care is a type of health care plan that includes the use of health savings accounts, flexible spending plans or some other sort of savings plan for minor health expenses. Larger expenses for more serious care issues are covered through a catastrophic health insurance plan, which has a large deductible and cannot be used for things such as routine doctor visits. (See Reference 1)

Benefits

• The use of a health savings account, flexible spending account or another form of personal savings allows individuals to not worry about whether they are receiving care from an in-network doctor or not. They may seek care from whomever they choose. Further, they alone choose how much to put away in savings for medical issues, and will likely get a choice of different catastrophic plans as well.

Function

• The main job of any health insurance plan is to prevent the patient from having catastrophic financial losses. While most traditional health plans will also cover more routine matters, this often pushes the cost of those plans higher than they would otherwise be. That is why catastrophic plans were created and the thrust of consumer-driven care.

Effects

• The idea behind patient-centered approaches like consumer-driven care is that if individuals use a health savings plan or flexible spending account, then they will take a more careful assessment of their health care spending, according to a policy brief paper written by John Goodman in December 2006. (See Reference 1) Thus, overall efficiencies will be seen in the system because individuals have to take more responsibility for payment.

Considerations

• If putting money away in some type of medical savings plan, individuals must understand there will be times when it is needed to pay for more than just routine care. The money can also be used to pay the deductible in a catastrophic or high-deductible health plan. Therefore, it is important to make sure some of that money is set aside, in case something like hospitalization is needed.

Criticisms

• Gail Shearer, director of Health Policy Analysis for the Consumers Union, testified before the Joint Economic Committee in Washington, in 2004, that consumer-driven care was not the answer. Among her criticisms were that those families who had members with chronic illnesses could not build a nest egg and thus were forced to spend more than the average family for health care. Further, managed care does nothing to address the problem that many have regarding not being able to find coverage for pre-existing conditions, Shearer said. (See Reference 2)