The True Story

A new survey that is highly critical of consumer-directed health care is getting attention in the media, and once again, we need to tell you what it really says.

The Commonwealth Fund and the Employee Benefit Research Institute (EBRI) have produced the third in a series of studies that we can only believe reflects an agenda to show that CDHC is a failure. The Commonwealth website, for example, highlights the clearly inaccurate claim that these plans are only for the healthy and wealthy. The joint news release says that enrollment in the plans remains low, that they do not help to reduce the number of uninsured, and that participants are less satisfied with their plans and have more missed care, just for example.

The survey size this time is better than in the past: 4,217 people with private insurance participated in the on-line survey, and nearly half of them had high-deductible health plans, with or without spending accounts.

While we don't have the tens of thousands of dollars to spend on a survey like this, we can mine the data to find out what we need to know about how the plans are working and where improvements are needed. Here are a few things from the survey that Commonwealth and EBRI didn't highlight:


  • Individuals in CDHC plans are more cost-conscious in their health care decision-making


  • They are significantly less likely to report avoiding or delaying needed care


  • They reported using health services at rates similar to those in comprehensive health plans


  • People in CDHC plans are more, or at least as, likely to get their blood pressure or cholesterol checked, have a dental exam, or receive a mammogram, pap test, or colon screening


  • Participation in consumer-directed plans was higher among those aged 45-64 than in comprehensive health plans


  • People in CDHC plans are less likely to be obese or to smoke and are more likely to get regular exercise


  • The number of people with comprehensive coverage in large firms is declining while the number of people in consumer-directed plans is increasing


  • The overwhelming reason that people pick CDHC plans is that they are less expensive than other plans and that they have an opportunity to save money in their accounts for future needs


  • 61% of employers are contributing to the accounts of people with CDHC plans at work


  • 70% of employers and nearly as many employees each contribute $1,000 a year or more to their health accounts for family plans


  • 44% of people with CDHC plans have $1,000 or more in their health spending accounts


  • In 2007, there was a significant increase in the share of CDHC plan enrollees who were extremely or very satisfied with the quality of care they received and the quality of their health plan, and who would recommend their plan to a friend or co-worker


  • People in consumer-directed plans continue to say they don't get enough information about quality and cost from their health plans, but they are more likely to seek information elsewhere.

So what is the bottom line, according to Commonwealth and EBRI? "In these deficit-strapped times, when the nation faces critical health system challenges, the question for policymakers is whether the tax advantages that the federal government provides the enrollees of these health plans over those in other types of plans are achieving the broader health system goals that they are aimed at."

What? The headline of the study implies that CDHC is a flop, with only 2% of the population enrolled and only about half of them having tax-preferred health spending accounts. But the majority of the trends are moving in the right direction, to achieve the goals of providing new incentives for people to be more responsible users of health care and coverage.

Lawmakers might want to look at what the survey really says rather than the biased press releases in making their decisions.


And we noticed a particularly encouraging commentary by 1972 Democratic presidential candidate, George McGovern. Entitled "Freedom Means Responsibility," the former senator now says that he has gained new respect for the value of liberty. Here are his words:

"Under the guise of protecting us from ourselves, the right and the left are becoming ever more aggressive in regulating behavior…

"Health-care paternalism creates [a] problem that's rarely mentioned: Many people can't afford the gold-plated health plans that are the only options available in their states.

"Buying health insurance on the Internet and across state lines, where less expensive plans may be available, is prohibited by many state insurance commissions. Despite being able to buy car or home insurance with a mouse click, some state governments require their approved plans for purchase or none at all. It's as if states dictated that you had to buy a Mercedes or no car at all…

"Why do we think we are helping adult consumers by taking away their options?…

"The nature of freedom of choice is that some people will misuse their responsibility and hurt themselves in the process. We should do our best to educate them, but without diminishing choice for everyone else."

If we are just patient and don't give up, people will see the essential value of liberty.


And we wish you all a Blessed Easter.

Grace-Marie Turner

Click here to read or post comments



The Grass Is Not Always Greener: A Look at National Health Care Systems Around the World
Michael Tanner
Cato institute, 03/18/08

Critics of the U.S. health care system frequently point to other countries with government-run, national health care systems as models for reform. However, a closer look shows that nearly all health care systems worldwide are wrestling with problems of rising costs and lack of access to care, writes Tanner. Overall trends from national health care systems around the world suggest the following:


  • Health insurance does not mean universal access to health care. In countries weighted heavily toward government control, people are most likely to face long waiting lists for treatment, rationing, restrictions on physician choice, and other obstacles to care.
  • Rising health care costs are not a uniquely American phenomenon. Although other countries spend considerably less than the U.S. on health care, costs are rising almost everywhere, leading to budget
    deficits, tax increases, and benefit reductions.
  • Countries with more effective national health care systems are successful to the degree that they incorporate market mechanisms such as competition, cost sharing, market prices, and consumer choice, and eschew centralized government control.

Although no country with a national health care system is contemplating abandoning universal coverage, the broad and growing trend is to move away from centralized government control and to introduce more market-oriented features.

Lawmakers Should Approach Wyden-Bennett Health Bill with Caution
Nina Owcharenko
The Heritage Foundation, 03/13/08

The Healthy Americans Act, sponsored by Sens. Ron Wyden and Bob Bennett, challenges the status quo on the federal tax treatment of health insurance and public health programs for the poor, writes Owcharenko. But the legislation needs significant changes if it is to be successful. The proposal's major problems are rooted in its sweeping and heavy-handed federal control over the insurance markets and its replacement of one tax inequity with another. Beyond these shortcomings are other unpleasant policy surprises such as the establishment of Medicare pricing over prescription drugs, permitting prescription drug reimportation, and even mandating that health insurers must cover abortion services. Instead of adopting features of the bill that turn to government regulation in an effort to squeeze out efficiencies in the system, lawmakers should look toward introducing more competition to achieve more affordable insurance.

Measuring Disparities, Improving Health: Closing the Gap
Thomas Miller, American Enterprise Institute
Health Affairs Blog, 03/17/08

Our technical ability to measure apparent differences in mortality, health status, and access to health care services among various subpopulations and groups continues to expand much more rapidly than the identification and implementation of sustainable steps to reduce, let alone, eliminate them, writes AEI's Tom Miller, in a Health Affairs posting on health care disparities. Miller recommends rebalancing our health investments to focus more on the lives of children from disadvantaged environments. Quite simply, interventions to boost both health and skills development are more effective in early childhood than later in life, and building mutually reinforcing early advantages for targeted populations are much less costly than trying to correct deficits and their likely consequences much later, he writes. Additionally, it would be better to shape such early interventions more broadly, with greater emphasis on improving education quality and the development of fundamental skills, rather than delivery of enhanced health care services alone. He concludes by saying that although expensive health technology may at first be more available to those consumers with more education, or greater resources, its benefits eventually extend to everyone, even those more prone to experiencing health disparities.

Clinton Role in Health Program Disputed
Susan Milligan
The Boston Globe, 03/14/08

Sen. Hillary Clinton, who has frequently described herself on the presidential campaign trail as having played a pivotal role in forging a children's health insurance plan, had little to do with crafting the landmark legislation or ushering it through Congress, according to several lawmakers, staffers, and healthcare advocates involved in the issue, reports The Boston Globe. Clinton has described the State Children's Health Insurance Program (SCHIP), as an initiative "I helped to start" and regularly cites the number of children in each state who are covered by the program. But the Clinton White House fought the first SCHIP effort, spearheaded by Senators Edward Kennedy and Orrin Hatch, because of fears that it would derail a bigger budget bill. And several current and former lawmakers and staff said Hillary Clinton had no role in helping to write the congressional legislation. "I do like her," Hatch said of Hillary Clinton. "We all care about children. But does she deserve credit for SCHIP? No — Teddy does, but she doesn't."

The Centers for Medicare and Medicaid Services has released 2007 SCHIP enrollment figures.

Insurers, Doctors at Odds Over 'Concierge' Care
Lynn Cook
Houston Chronicle, 03/13/08

Doctors who charge an annual fee to patients in exchange for customized care including house calls are drawing the ire of some health insurance companies, reports the Houston Chronicle. United Healthcare confirmed it is dropping four local doctors from its network in April because the company disapproves of their so-called "concierge medicine" model. Cigna is also condemning the practice, in which physicians charge an annual retainer of $1,500 to $1,800 for patients who then receive more personal care. While some medical specialists have chosen to stop dealing with insurance companies entirely, others are trying to couple concierge care with insurance payments. United and Cigna say that's improper. Other major health insurers, including Aetna, Humana and Blue Cross Blue Shield of Texas, consider concierge care just fine so long as patients are clearly informed that the insurers will not reimburse any of the retainer. The Washington Post also writes about the trend toward concierge medicine and notes that more than 1,000 doctors have switched to this mode of practice.

Keeping a Health Policy After You Leave Your Job
The Washington Post, 03/16/08

The Washington Post on Sunday published a series of articles about the market for individually-purchased health insurance and how it works for the 18 million Americans who buy it. The articles offer how-to guidance, even suggesting an HSA-compatible high-deductible policy. One article reports that people leaving a workplace group-insurance plan have some options that others in the individual market do not. "First, under COBRA, which applies to workers at companies with 20 or more employees, you have the right to continue on your employ
er's plan for up to 18 months, and in some cases longer. Continuing in a group plan, which you do under COBRA, also makes you 'HIPAA-eligible' when you enter the individual market. HIPAA requires states to have at least two policies available without pre-existing condition exclusions. If a state doesn't have those two policies available, then it must set up an assigned risk pool."

Once Uninsured, She's Happy to be Consumer
Patrick McIlheran
Milwaukee Journal Sentinel, 03/11/08

The Healthy Indiana Plan shows how consumer-driven coverage can help in the public sector, reports the Milwaukee Journal Sentinel. Shelley Ross was the first of about 28,000 lower-income people who have signed up so far for the Healthy Indiana Plan, meant to subsidize coverage for adults who have no insurance. She signed up in December, had a cataract excised soon after, had the mammogram she was putting off. Demand to enroll in the program has been three times what officials expected, says Mitch Roob, the state's secretary of social services. Medicaid covers catastrophic care when bills exceed $1,100 a year. For routine care under that, the patient pays out of an account funded jointly by the state and the policy holder. Anything left over in the account rolls over to next year. The price is right for Ross, who makes about $25,000 a year. At $91 a month, "I'm smiling when I write that check," she says. "It's not like I wanted a free ride."


Creating a Health Care System That Works for Americans
Mayo Clinic Event featuring President and CEO Denis Cortese, M.D.
Friday, March 21, 2008, Noon
Washington, DC

Grace-Marie Turner speaking on the Mornings with Lorri & Larry Show
Sirius 161 FamilyNet Radio Broadcast
Monday, March 24, 2008, 6:00 a.m.

Another Warning for Medicare?
American Enterprise Institute Event
Wednesday, March 26, 2008, 12:30 p.m. – 2:00 p.m.
Washington, DC

Healthcare Cost of Quality: The Relationship between Performance Metrics and Financial Results
American Society for Quality Webinar
Wednesday, March 26, 2008, 1:00 pm. – 2:00 p.m. CDT

Can We Repair What's Wrong with our Health Care System through Christian Principles?
Acton Institute Event
Thursday, April 10, 2008, 12:00 p.m. – 1:30 p.m.
Grand Rapids, MI
Grace-Marie Turner will discuss how free-market solutions can create a health care system that supports individual freedom over health care decisions.

Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features research and writings by participants in the Health Policy Consensus Group, articles of interest from the health policy world, and announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at

If you wish to subscribe to this free weekly newsletter, update your address, or be removed from our list, please send an e-mail message to

The views expressed in this newsletter are the opinions of the authors and do not necessarily reflect the views of the Galen Institute or its directors.