|A Cost/Benefit Analysis of Consumer Driven Health Plans
| Dustin White
Master's Candidate, Department of Statistics, Colorado State University
Thursday, May 10, 2007
D 104 Engineering
The soaring costs of healthcare in America have been an issue of debate for decades. Policy makers and business owners, as well as independent researchers, have all spent time and money trying to understand and rectify a plethora of issues that modern healthcare faces, including substantial cost inflation rates, over-utilization or unnecessary utilization of services, and the growing number of uninsured Americans. One of the primary voices in this debate has been that of large employers who provide healthcare benefits to their employees. Large employers in America insure a substantial portion of the American workforce. As healthcare costs increase each year, often at rates five to six times higher than inflation, these employers have sought out ways to keep their costs low while at the same time providing the type of benefit plans that will attract and sustain a competitive labor population within their organization. One alternative that has grown in popularity and utilization in the past few years has been dubbed Consumer Driven Health Plans (CDHPs). This presentation will provide a brief overview of the inner workings of CDHPs within the context of two firms who implemented such healthcare benefit plans in their organizations. In particular, the focus will be on overall costs for the employer, the employee, and for the organization as a whole from an aggregate perspective by invoking econometric models to model costs based on behavioral and demographic characteristics.