HIGH-DEDUCTIBLE PLANS DO MAKE PEOPLE MORE CAREFUL ABOUT HEALTHCARE USE

People in a new kind of health plan that makes consumers pay for a bigger share of their care appear to be more cost-conscious than those in traditional plans, but half say they would switch if they had the chance, according to a survey released yesterday. The survey of 1,389 people by the nonprofit Kaiser Family Foundation found that 71 percent of those in the new "consumer-directed health plans" said the policies prompted them to consider cost when seeking health care, compared with 49 percent of those with more traditional employer-sponsored coverage.

For instance, people in the new plans were more likely to ask about the cost of a doctor's visit and inquire about the availability of lower-cost alternatives in treatments and tests. More than half, 55 percent, who sought care said the new plans have changed their approach to using health care.

Such findings are in line with assertions by the Bush administration and other advocates who say that the new plans will check spiraling health-care spending by giving consumers a financial incentive to shop around for the best care at a reasonable price -- and to get only the care they need.

"It's a cultural shift," said Devon Herrick, a health economist at the National Center for Policy Analysis in Dallas. "When you go to Wal-Mart you don't have to ask about price -- it's right there next to the good or service you are buying. Health care is not there yet, but it's getting that way. This is the early stages. We have the incentives to get people more responsible and asking about price."

In contrast with other plans that typically require $15 or $20 co-payments for visits to the doctor, the new plans can require consumers to shell out hundreds or thousands of dollars of their own money for medications, physicians' services and hospital care before most coverage kicks in. The plans have high annual deductibles, but their premiums tend to be lower.

Some consumers complain that the new plans are confusing, and the Kaiser survey found that the plans are not without problems. More than 60 percent of people in the plans said it is hard to find good information about the cost of doctors' services and hospital care; and about 50 percent said information on quality of care is hard to come by. Half of those enrolled in the plans said they would switch out if given the choice, compared with a third of those in traditional plans. And they were twice as likely as those in traditional plans to say that they went without care because of cost.

Gail Shearer, director of health policy analysis at Consumers Union, noted that the survey found that people in the new plans tend to be wealthier, healthier and more educated than their counterparts in traditional plans, and were more likely to be white. "Instead of our health system moving towards one where we're all in this together, this type of option is leading to more splitting the population into different segments and, to me, that's an unhealthy thing," Shearer said. She added that poorer, sicker consumers could get left behind.

The new plans are often coupled with special accounts that allow consumers -- or employers on behalf of their workers -- to set aside tax-free dollars to pay for medical expenses, with any unused money rolling over into the following year. About 3 million people are enrolled in such plans this year, and experts expect that number to grow. "The folks in the programs now are early adopters, pioneers," said Greg Scandlen, president of Consumers for Health Care Choices, a Hagerstown, Md.-based nonprofit group that favors the plans. "And they are really testing the waters, and I think they are already forcing a lot of change. . . . With any kind of new insurance plan it takes a while to figure out what it's all about."

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For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation. Both Australia and Sweden have large private sector health systems with government reimbursement for privately-provided services so can a purely private system with some level of government reimbursement or insurance for the poor be so hard to do?

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