This book provides a balanced 360 degree view of consumer directed health care. It provides insight, analysis, and original research to help us see more clearly the important dimension in the future of American health care.

Insurance carriers, employers, and individuals are showing increasing interest in consumer-directed health plans (CDHP). CDHPs typically combine a high-deductible health plan with a health reimbursement arrangement (HRA) or health savings account (HSA). HRAs and HSAs are tax-advantaged accounts used to pay enrollees' health care expenses, and unused balances may accrue for future use, potentially giving enrollees an incentive to purchase health care more prudently. The plans also provide decision-support tools to help enrollees become more actively involved in making health care purchasing decisions. Because CDHPs are relatively new, there is interest in the extent of enrollment and in other aspects of the plans. GAO was asked to review the prevalence of CDHPs, how the associated accounts are funded and used, and the factors that may contribute to the growth or limit the appeal of these plans. GAO examined survey data on CDHP enrollment and interviewed or obtained data from employers, insurance carriers, individuals, financial institutions, and other

Cost has deterred the majority of small businesses from providing health insurance to their workers. Consumer-directed health plans, which are potentially less costly than traditional health plans, may be well suited to workers in small businesses. The authors study the factors that are associated with CDHP offering, determine the variation in CDHP offering among large and small firms, and develop models of persistence in CDHP offering. Their analysis of the Kaiser-HRET survey shows that small firms have been no quicker in their uptake of CDHPs than larger firms, and appear to display somewhat more churning in CDHP offering than large firms. Small firms that employ between three and 49 workers are less likely to offer HRA/HSA plans than large firms. Furthermore, firms that employ 200 to 499 workers appear to be less likely to offer both HRA/HSA plans and HD plans compared to larger firms. Their results suggest a limited role for the current incarnation of consumer-directed health plans in encouraging small business to provide insurance.

"Consumer-directed health plans (CDHP) combine a high-deductible health plan with a tax-advantaged account, such as a health reimbursement arrangement (HRA), that enrollees can use to pay for health care expenses. In an effort to restrain cost growth, several employers, including the federal government through its Office of Personnel Management (OPM), have offered HRAs for several years.For enrollees in HRAs compared with those in traditional plans such as preferred provider organization (PPO) plans, GAO assessed (1) differences in health status, and (2) changes in spending and utilization of health care services. GAO analyzed data from two large employers-one public and one private-that introduced an HRA option in 2003. GAO compared changes in health spending and utilization before and after 2003 for enrollees who switched from a PPO into an HRA (the HRA group) with those who stayed in a PPO (the PPO group). At the time GAO made its data requests to each employer, 2007 data from the public employer and 2005 data from the private employer were the most current and complete data available. GAO also reviewed published studies that included an assessment of the health status, spending, or utilization of HRA and other CDHP enrollees compared..."