Putting consumers at risk in health care: A policy evaluation and interpretation of consumer-directed health benefits

As employers face accelerating health insurance premium growth, the demise of its paragon to cost control (managed care), and a persistent, soft economy, they are turning to their employees to take on more risk in health insurance. This dissertation is a policy evaluation of consumer-directed health benefits (CDHB)—a health insurance product with design features that include a savings account, large deductible, catastrophic insurance, and information supports—focused on the impact on employees and their families.; A comprehensive and synthetic framework for evaluating future policy options is developed to guide the analysis. A variety of analytic lenses and methods are used to address theoretic validity, feasibility, diffusion, and implementation and key outcomes including health, financial security, wages, insurance coverage, cost-sharing, and cost growth.; Overall, CDHB does not represent a cost shift to consumers nor does it disadvantage the most vulnerable as opponents assert. However, the distributional consequences are profound if universally applied—the healthy reduce out-of-pocket payments by more than 50% whereas those with slight/moderate illnesses incur a cost shift of {dollar}40 billion. There is no reasonable evidence that CDHBs will reduce the ranks of the uninsured, improve efficiency, or enhance health. It may increase the rate of cost growth and reduce take-home pay. Diffusion and implementation challenges will dilute its potency. Market share is estimated at 10% by 2009.; CDHBs favor those who need financial security the least. It is more a slogan than an innovation, more employer-driven than consumer-driven, and more about risk than about choice. It is unlikely to harness the enormous human and financial capital that consumers can contribute to health care reform.; Three program recommendations are made toward the evolution of consumer-directed plans including more information on risk to empower and protect employees, a focus on prescription drugs, and a formula for balance in CDHB design. Recommendations for research include longitudinal designs, replication, evaluation of pioneer firms, and analyses of participant and cost-effectiveness models.