THE COMMONWEALTH
FUND
Consumer Driven Care: Potential Consumer Driven Care: Potential and Concernsand Concerns
Karen DavisPresident, The Commonwealth FundConsumer Driven Healthcare Summit
September 14, [email protected]
2
THE COMMONWEALTH
FUND
Data SourcesData Sources• EBRI/Commonwealth Fund Consumerism in Health Care Survey
– 1,204 Adults 21-64, September 28 - October 19, 2005; Harris Online
– Comprehensive – plan with no deductible or <$1000 (individual), <$2000 (family) - n=1,061 (all from national sample)
– HDHP – plan with deductible $1000+ (individual), $2000+ (family), no account - n=463 (126 – national, 337 – oversample)
– CDHP – plan with deductible $1000+ (individual), $2000+ (family), with account - n=185 (17 – national, 168 – oversample)
• P. Fronstin, S.R. Collins, Early Experience with High-Deductible and Consumer-Driven Health Plans: Findings From the EBRI/Commonwealth Fund Consumerism in Health Care Survey, EBRI Issue Brief, December 2005.– Will be repeated this fall – Released in December 2006
3
THE COMMONWEALTH
FUND
Data Sources (con’t)Data Sources (con’t)• Commonwealth Fund 2005 Biennial Health Insurance Survey
– 1,878 adults ages 19–64 insured all year with private insurance, August 18, 2005–January 5, 2006; telephone; Princeton Survey Research Associates
– Deductibles under $500, $500-999, $1000 and over
– New results on employer-sponsored and individual insurance and by size of deductible released today
• S.R. Collins, et al., TK, The Commonwealth Fund, September 2006
• Kaiser Survey of Employer Health Plans, 2005
– G. Claxton et al., “What High Deductible Health Plans Look Like: Findings from a National Survey of Employers, 2005,” Health Affairs Web Exclusive, September, 14, 2005;
– J. Gabel et al., “Health Benefits in 2005: Premium Increases Slow Down, Coverage Continues to Erode,” Health Affairs, September/October 2004
4
THE COMMONWEALTH
FUND
Employers Contributions Lower for Workers in HSA-Employers Contributions Lower for Workers in HSA-Qualified HDHP; Employees Premiums and Deductibles Qualified HDHP; Employees Premiums and Deductibles
HigherHigher
431 610
2270
3413
1348323
553
0
1000
2000
3000
4000Deduc tible c ontributionP remium c ontribution
^ “All plans” refers to all conventional HMOs, PPOs, and POS plans in the survey, not just HDHP/HRA or HSA-qualified HDHPs. Source: Calculated based on: G. Claxton et al., “What High Deductible Health Plans Look Like: Findings from a National Survey of Employers, 2005,” Health Affairs Web Exclusive, September, 14, 2005; J. Gabel et al., “Health Benefits in 2005: Premium Increases Slow Down, Coverage Continues to Erode,” Health Affairs, September/October 2004.
All plans^
All plans^
$1,779
$933
$2,823
Dollars
$3,413
Worker contribution Employer contribution
HSA-qualified
HDHP
HSA-qualified
HDHP
5
THE COMMONWEALTH
FUND
Few Insured People Are Currently Covered by High Few Insured People Are Currently Covered by High Deductible Health PlansDeductible Health Plans
Source: The Commonwealth Fund Biennial Health Insurance Survey (2005).
ESI, Deductible <$1000,
73%
Individual, Deductible <$1000,
4%
Don’t know/ refused,
13%
Percent of 108.2 million adults 19-64 insured all year with employer-sponsored or individual insurance
ESI, Deductible $1000 or more
(7%)
Deductible $1000 or more,
10%
Individual, Deductible $1000
or more (3%)
6
THE COMMONWEALTH
FUND
Distribution of Individuals Covered by Private Distribution of Individuals Covered by Private Health Insurance, by Type of Health PlanHealth Insurance, by Type of Health Plan
HDHP
9%
CDHP
1%
Comprehensive
89%
Note: Comprehensive = plan w/ no deductible or <$1000 (ind), <$2000 (fam); HDHP = plan w/ deductible $1000+ (ind), $2000+ (fam), no account; CDHP = plan w/ deductible $1000+ (ind), $2000+ (fam), w/ account.
Source: P. Fronstin, S.R. Collins, Early Experience with High-Deductible and Consumer-Driven Health Plans: Findings From the EBRI/Commonwealth Fund Consumerism in Health Care Survey, EBRI Issue Brief, December 2005.
7
THE COMMONWEALTH
FUND
Less than Half of Those Enrolled in Employer-Based Less than Half of Those Enrolled in Employer-Based High Deductible Health Plans Had a ChoiceHigh Deductible Health Plans Had a Choice
58
47 45
0
25
50
75
Traditional(n=1016)
CDHP HDHP
Percent of adults with employer-based coverage who were offered a choice of health plans
• CDHP and HDHP owners are less likely to have a choice of plans from their employer
• When they have a choice, the savings account is the leading reason for choosing CDHP, while premium cost is the most frequent reason for choosing HDHP. Traditional plans are chosen for low out-of-pocket costs.(n=134) (n=334)
Source: P. Fronstin, S.R. Collins, Early Experience with High-Deductible and Consumer-Driven Health Plans: Findings From the EBRI/Commonwealth Fund Consumerism in Health Care Survey, EBRI Issue Brief, December 2005.
8
THE COMMONWEALTH
FUND
Adults Covered by Employer Health Insurance Adults Covered by Employer Health Insurance with a Choice of Plan Were Less Likely with a Choice of Plan Were Less Likely to Pick a Plan with a Higher Deductibleto Pick a Plan with a Higher Deductible
Higher25%
Lower44%
Deductible was the same
4%
Source: The Commonwealth Fund Biennial Health Insurance Survey (2005).
Don’t know/ refused
20%
Percent of adults ages 19–64 with ESI and insured all year
No plans have a deductible
7%
9
THE COMMONWEALTH
FUND
Enrollees of HDHP/CDHPs Are Less Satisfied Enrollees of HDHP/CDHPs Are Less Satisfied with Their Coveragewith Their Coverage
8
28
63
29
3933 32
26
42
0
25
50
75
Extremely or very
satisfied
Somew hat
satisfied
Not satisfied
Comprehens ive HDHP CDHPPercent
*
**
**
*Difference between HDHP/CDHP and Comprehensive is statistically significant at p ≤ 0.05 or better.
Source: P. Fronstin, S.R. Collins, Early Experience with High-Deductible and Consumer-Driven Health Plans: Findings From the EBRI/Commonwealth Fund Consumerism in Health Care Survey, EBRI Issue Brief, December 2005.
10
THE COMMONWEALTH
FUND
Enrollees of HDHP/CDHPs Are Less Satisfied Enrollees of HDHP/CDHPs Are Less Satisfied with Out-of-Pocket Costswith Out-of-Pocket Costs
21
3642
31
12
57
1828
54
0
25
50
75
Extremely or very
satisfied
Somew hat
satisfied
Not satisfied
Comprehens ive HDHP CDHP
*Difference between HDHP/CDHP and Comprehensive is statistically significant at p ≤ 0.05 or better.
Source: P. Fronstin, S.R. Collins, Early Experience with High-Deductible and Consumer-Driven Health Plans: Findings From the EBRI/Commonwealth Fund Consumerism in Health Care Survey, EBRI Issue Brief, December 2005.
Percent
* *
**
*
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THE COMMONWEALTH
FUND
Enrollees of HDHP/CDHPs Are Less Satisfied Enrollees of HDHP/CDHPs Are Less Satisfied with Choice of Doctorswith Choice of Doctors
*Difference between HDHP/CDHP and Comprehensive is statistically significant at p ≤ 0.05 or better.
Source: P. Fronstin, S.R. Collins, Early Experience with High-Deductible and Consumer-Driven Health Plans: Findings From the EBRI/Commonwealth Fund Consumerism in Health Care Survey, EBRI Issue Brief, December 2005.
6
21
73
11
29
6069
10
21
0
20
40
60
80
Extremely or very
satisfied
Somew hat satisfied Not Satisfied
Comprehens ive HDHP CDHPPercent
*
*
*
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THE COMMONWEALTH
FUND
Enrollees of HDHP/CDHPs Are More Likely to Enrollees of HDHP/CDHPs Are More Likely to Delay or Avoid Getting Health Care Due to Delay or Avoid Getting Health Care Due to
CostCost
2621
17
42
313135
48
40
0
25
50
75
Total Health P roblem <$50,000 Annual
Inc ome
Comprehens ive HDHP CDHP
Percent of adults 21-64
(n = 61)
(n = 90)
*Difference between HDHP/CDHP and Comprehensive is statistically significant at p ≤ 0.05 or better.
Source: P. Fronstin, S.R. Collins, Early Experience with High-Deductible and Consumer-Driven Health Plans: Findings From the EBRI/Commonwealth Fund Consumerism in Health Care Survey, EBRI Issue Brief, December 2005.
*
*
*
**
*
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THE COMMONWEALTH
FUND
Overall Satisfaction with Health Care Received in Last 12 Overall Satisfaction with Health Care Received in Last 12 Months, by DeductibleMonths, by Deductible
4954
42
29
0
25
50
75
Total <$500 $500–$999 $1,000+
Percent of adults ages 19–64 insured all year with private insurance who are very satisfied
Source: The Commonwealth Fund Biennial Health Insurance Survey (2005).
Annual Deductible
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THE COMMONWEALTH
FUND
Adults with Higher Deductibles Are More Adults with Higher Deductibles Are More Likely to Rate Their Current Health Insurance Coverage Likely to Rate Their Current Health Insurance Coverage
“Fair” or “Poor”“Fair” or “Poor”
1915
23
41
0
25
50
75
Total <$500 $500–$999 $1,000+
Percent of adults ages 19–64 insured all year
Source: The Commonwealth Fund Biennial Health Insurance Survey (2005).
Annual Deductible
15
Adults with High Deductibles Pay Higher Out-of-Pocket Adults with High Deductibles Pay Higher Out-of-Pocket Expenses and PremiumsExpenses and Premiums
900 835
2250 2250 2250
3750
1300
2020
$0
$1,100
$2,200
$3,300
$4,400
$5,500
Total <$500 $500–$999 $1,000+
OOP expenses P remium expenses
Note: Among adults ages 19-64.Source: The Commonwealth Fund Biennial Health Insurance Survey (2005).
Annual Deductible
Median annual household out-of-pocket and premium expenses among respondents insured all year with employer-sponsored insurance
16
THE COMMONWEALTH
FUND
Two-Thirds of Adults with High Deductible Plans Spent 5% or More of Two-Thirds of Adults with High Deductible Plans Spent 5% or More of Their Income on Out-of-Pocket Expenses and PremiumsTheir Income on Out-of-Pocket Expenses and Premiums
40 36
55
67
25 22
3643
0
25
50
75
100
Total <$500 $500–$999 $1,000+
H ousehold spent 5% or more of inc ome on out-of-poc ket c os ts and premiums
H ousehold spent 10% or more of inc ome on out-of-poc ket c os ts and premiums
Percent of adults 19-64 insured all year with private insurance
Note: Among adults ages 19-64.Source: The Commonwealth Fund Biennial Health Insurance Survey (2005).
Annual Deductible
17
THE COMMONWEALTH
FUND
Health Plans with Higher Deductibles Are More Likely to Health Plans with Higher Deductibles Are More Likely to Place Limits on Total Dollar Amount They Will Pay for Place Limits on Total Dollar Amount They Will Pay for
Medical Care Each YearMedical Care Each Year
3430
40
48
0
25
50
75
Total <$500 $500–$999 $1,000+
Percent of adults ages 19–64 insured all year with private insurance
Source: The Commonwealth Fund Biennial Health Insurance Survey (2005).
Annual Deductible
18
THE COMMONWEALTH
FUND
Problems with Health Insurance Plan, by Problems with Health Insurance Plan, by DeductibleDeductible
1923
6
37 35
11
40 40
15
0
25
50
75
H ad expens ive medic al
bills for servic es not
c overed by insuranc e
Doc tor c harged more than
insuranc e w ould pay and
you had to pay differenc e
Reac hed limit of w hat
insuranc e c ompany w ould
pay and left w ith expens ive
bills
<$500 $500–$999 $1,000+
Percent of adults ages 19–64 insured all year with private insurance
Source: The Commonwealth Fund Biennial Health Insurance Survey (2005).
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THE COMMONWEALTH
FUND
Bill Problems, by DeductibleBill Problems, by Deductible
148 6
172323
913
2735
20
5
17
31
41
0
25
50
75
Not able to pay
medical bil ls
Contac ted by
collec tion
agency*
Had to change
w ay of l ife to
pay medical
bil ls
Medical bil ls /
debt being paid
off over time
A ny medical bil l
problem or
outstanding
debt
<$500 $500–$999 $1,000+
Percent of adults ages 19–64 insured all year with private insurance
*Includes only those individuals who had a bill sent to a collection agency when they were unable to pay it.
Source: The Commonwealth Fund Biennial Health Insurance Survey (2005).
20
THE COMMONWEALTH
FUND
Access Problems, by DeductibleAccess Problems, by Deductible
16
811 12
2522
1217 19
3127
1926 24
44
0
25
50
75
Did not fi ll a
presc ription
Did not see
spec ialist w hen
needed
Skipped
recommended
test, treatment,
or follow -up
Had medical
problem, did not
see doc tor or
c linic
A ny of the four
access
problems
<$500 $500–$999 $1,000+
Percent of adults ages 19–64 insured all year with private insurance
Source: The Commonwealth Fund Biennial Health Insurance Survey (2005).
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THE COMMONWEALTH
FUND
• Costs aren’t high because patients don’t pay enough – they are high because of the way we organize care and pay physicians, hospitals, and other providers
• Americans already pay a lot out-of-pocket for care
• High deductibles have an adverse effect on access to care for vulnerable populations
• High deductibles add to financial burdens on vulnerable populations and consume savings needed for retirement
• The information on which to make cost-conscious choices is a long way from being available
HDHP/HSAs – Wrong RxHDHP/HSAs – Wrong Rxfor American Health Carefor American Health Care
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THE COMMONWEALTH
FUND
0
1000
2000
3000
4000
5000
6000
0 100 200 300 400 500 600 700 800 900
a
Note: Adjusted for differences in the cost of living, 2003.Source: Bianca K. Frogner and Gerard F. Anderson, “Multinational Comparisons of Health Systems Data, 2005,” The Commonwealth Fund, April 2006.
a 2002Out-of-Pocket Health Care Spending per Capita, US$Out-of-Pocket Health Care Spending per Capita, US$
National Health Expenditures per Capita, US$National Health Expenditures per Capita, US$
United States
Australia
OECD Median
Canada
Japana
New Zealand
GermanyFranceNetherlands
Americans Spend More Out-of-Pocket on Americans Spend More Out-of-Pocket on Health Care ExpensesHealth Care Expenses
23
THE COMMONWEALTH
FUND
Consumers Spending More Consumers Spending More Out-of-Pocket for Health CareOut-of-Pocket for Health Care
0
100
200
300
400
500
600
700
800
900
Source: C. Smith et al., “National Health Spending in 2004: Recent Slowdown Led by Prescription Drug Spending,” Health Affairs 25, no. 1 (January/February 2006); Centers for Medicare and Medicaid Services, National Health Expenditures Data; http://www.cms.hhs.gov/NationalHealthExpendData/downloads/tables.pdf
Dollars spent per capita (in 2004 dollars)
$577 $583
$774
$667
$788
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THE COMMONWEALTH
FUND
Cost-Sharing Reduces Use of Both Essential Cost-Sharing Reduces Use of Both Essential and Less Essential Drugs and Increases Risk and Less Essential Drugs and Increases Risk
of Adverse Eventsof Adverse Events
9
1514
22
0
5
10
15
20
25
Essential Less Essential
E lderly Low Inc ome
Source: R. Tamblyn et al., “Adverse Events Associated With Prescription Drug Cost-Sharing Among Poor and Elderly Person,” JAMA 285, no. 4 (2001): 421–429.
Percent reduction in drugs per day
117
43
9778
0
20
40
60
80
100
120
140
Adverse Events ED V is its
E lderly Low Inc ome
Percent increase in incidence per 10,000
25
THE COMMONWEALTH
FUND
Increased Health Care Costs Have Reduced Increased Health Care Costs Have Reduced SavingsSavings
Has increased spending on health care expenses in the past year caused you to do any of the following? Among those with health insurance coverage who had increases in health care costs in the last year (n=731) (percentage saying yes)
45%
34%
29%
26%
24%
18%
Decrease your contributions to a retirement plan, such as a 401(k),
403(b) or 457 plan, or an IRA
Have difficulty paying for other bills
Decrease your contributions to other savings
Use up all or most of your savings
Borrow money
Have difficulty paying for basic necessities, like food, heat, and housing
Source: EBRI Health Confidence Survey, 2005.
26
THE COMMONWEALTH
FUND
Most Insured Don’t Have Quality and Cost Most Insured Don’t Have Quality and Cost Information to Make Informed ChoicesInformation to Make Informed Choices
Comprehensive HDHP/CDHPHealth plan provides information on quality of care provided by:
Doctors 14% 16%
Hospitals 14 15
Health plan provides information on cost of care provided by:
Doctors 16 12
Hospitals 15 12
Of those whose plans provide info on quality, how many tried to use it for:
Doctors 42 54
Hospitals 25 45
Of those whose plans provide info on cost, how many tried to use it for:
Doctors 15 36 (n = 76)
Hospitals 14 32 (n = 76)
Source: P. Fronstin, S.R. Collins, Early Experience with High-Deductible and Consumer-Driven Health Plans: Findings From the EBRI/Commonwealth Fund Consumerism in Health Care Survey, EBRI Issue Brief, December 2005.
27
THE COMMONWEALTH
FUND
HSAs Won’t Help the Uninsured for Whom Tax HSAs Won’t Help the Uninsured for Whom Tax Benefits Are of Little Value: Benefits Are of Little Value:
Income Tax Distribution of UninsuredIncome Tax Distribution of Uninsured
55% (0% tax bracket)
16% (10% tax bracket)
23% (15% tax bracket)
5% (27% tax bracket)
1% (30%-39%
tax bracket)
Source: S.A. Glied, The Effect of Health Savings Accounts on Health Insurance Coverage, The Commonwealth Fund, April 2005.
28
THE COMMONWEALTH
FUND
HDHPs Won’t Solve the Cost Problem:HDHPs Won’t Solve the Cost Problem:Most Costs Are Concentrated in the Very SickMost Costs Are Concentrated in the Very Sick
0%
10%
20%30%
40%
50%
60%
70%80%
90%
100%
U.S. Population Health Expenditures
1%5%
10%
55%
69%
27%
Source: A.C. Monheit, “Persistence in Health Expenditures in the Short Run: Prevalence and Consequences,” Medical Care 41, supplement 7 (2003): III53–III64.
Distribution of Health Expenditures for the U.S. Population, By Magnitude of Expenditure, 1997
50%
97%
$27,914
$7,995
$4,115
$351
Expenditure Threshold (1997
Dollars)
29
THE COMMONWEALTH
FUND
Modifications to HDHP/HSAsModifications to HDHP/HSAsto Reduce Potentially Harmful Effectsto Reduce Potentially Harmful Effects
• Permit employers to lower deductibles for lower-wage workers and qualify for HSAs
• Exempt primary care as well as preventive services from the deductible; exempt prescription drugs essential for management of chronic conditions
• Guarantee choice of a comprehensive health plan to workers covered under employer plans
• Permit greater flexibility in benefit design (e.g. actuarially equivalent benefits)
• Set an income ceiling on eligibility for HSAs to reduce the tax subsidy for high income individuals
30
THE COMMONWEALTH
FUND
Promising Strategies for Improving Affordability Promising Strategies for Improving Affordability and Achieving Savingsand Achieving Savings
• Better information on provider quality and total costs of care
• Pay-for-performance provider payment rewarding high quality and high efficiency
• Development of value networks of “high performing providers” under Medicare, Medicaid, and private insurance
• High cost care management and transitional care
• Improved access to primary care and preventive services
• Investment in health information technology
• National Institute of Clinical Excellence – evidence-based medicine
31
Two in Four Adults Experience Inefficient, Poorly Two in Four Adults Experience Inefficient, Poorly Coordinated, Unsafe CareCoordinated, Unsafe Care
42
25
19
17
17
0 25 50
Any of the above
Recommended unnecessarycare or treatment
Failed to provide importantmedical history or test results
to other doctors or nurses
Medical, surgical, medicationor lab test error
Ordered a test that hadalready been done
Percent of adults reporting a time they experienced each event in the past two years
Source: C. Schoen, S.K.H. How, I. Weinbaum, J.E. Craig, Jr., and K. Davis, “Public Views on Shaping the Future of the U.S. Health System,” The Commonwealth Fund, August 2006.
32
THE COMMONWEALTH
FUND
How important is it to you that: (percent)
Total very or somewhat important
Very important
Somewhat important
You have information about the quality of care provided by different doctors or hospitals
95 77 18
You have information about the costs of care to you BEFORE you actually get the care
91 69 22
Insurance companies identify and reward doctors and hospitals who achieve excellence in the quality and efficiency of care
87 62 25
Positive Public Views on the Need for Quality Positive Public Views on the Need for Quality and Cost Information and Payments that and Cost Information and Payments that
Reward PerformanceReward Performance
Source: C. Schoen, S.K.H. How, I. Weinbaum, J.E. Craig, Jr., and K. Davis, “Public Views on Shaping the Future of the U.S. Health System,” The Commonwealth Fund, August 2006.
33Half of Middle and Lower Income Adults Experienced Half of Middle and Lower Income Adults Experienced Serious Problems Paying for Medical Bills or Insurance in Serious Problems Paying for Medical Bills or Insurance in
Past Two Years Past Two Years
1928 30
116
19
22 18
23
16
0
25
50
75
Total Less than$35,000
$35,000 –$49,999
$50,000 –$74,999
$75,000 ormore
Somewhat seriousVery serious
2127 31
1910
17
2019
15
13
0
25
50
75
Total Less than$35,000
$35,000 –$49,999
$50,000 –$74,999
$75,000 ormore
Somewhat seriousVery serious
38
50 48
33
21
38
4850
35
23
Percent Percent
Medical Bills Health Insurance
Source: C. Schoen, S.K.H. How, I. Weinbaum, J.E. Craig, Jr., and K. Davis, “Public Views on Shaping the Future of the U.S. Health System,” The Commonwealth Fund, August 2006.
34
THE COMMONWEALTH
FUND
What Is the Top or Second Most Important Health Care What Is the Top or Second Most Important Health Care Issue for President and Congressional Action?Issue for President and Congressional Action?
Percent listing issue as top or second priority:
TotalLess than$50,000
$50,000-$74,999
$75,000or more
Ensure that all Americans have adequate, reliable health insurance
52 56 52 50
Control the rising cost of medical care 37 35 42 39
Lower the cost of prescription drugs 31 31 27 33
Ensure that Medicare remains financially sound long-term
29 29 32 30
Improve the quality of nursing homes and long-term care
14 16 15 13
Reform the medical malpractice system 14 10 12 18
Reduce the complexity of insurance 12 12 10 10
Source: C. Schoen, S.K.H. How, I. Weinbaum, J.E. Craig, Jr., and K. Davis, “Public Views on Shaping the Future of the U.S. Health System,” The Commonwealth Fund, August 2006.
35
THE COMMONWEALTH
FUND
Take Away MessagesTake Away Messages
• Closing gaps in insurance coverage is the number one priority
• Patients should have easy access to primary and preventive care; higher cost-sharing for primary care and lower cost-sharing for specialized care further distorts incentives
• Invest in quality improvement in chronic care, transitional care post-hospitalization
• Promote information technology and shared decision-making
• Reward high quality and efficient care• Forge public private partnerships to achieve
improved health system performance
36
THE COMMONWEALTH
FUND
AcknowledgementsAcknowledgements
Stephen C. Schoenbaum, M.D., Executive Vice President and Executive Director, Commonwealth Fund Commission on a High Performance Health System
Anne Gauthier, Senior Policy Director, Commonwealth Fund Commission on a High Performance Health System
Sara R. Collins, Senior Program Officer, The Commonwealth Fund and lead author, Gaps in Health Insurance: An All-American Problem, The Commonwealth Fund, April 2006; Early Experience with High-Deductible and Consumer-Driven Health Plans: Findings From the EBRI/Commonwealth Fund Consumerism in Health Care Survey, EBRI Issue Brief, December 2005.
Alyssa L. Holmgren, Research Associate, Commonwealth Fund
Visit the Fund at: www.cmwf.org