How do Consumer Directed Health Plans (CDHPs) generally impact healthcare spending?

Consumer Directed Health Plans (CDHPs) are designed to give patients more control over their healthcare decisions by incorporating higher deductibles and Health Savings Accounts (HSAs) or Health Reimbursement Arrangements (HRAs). This structure encourages enrollees to be more cost-conscious and to shop for value when it comes to their healthcare services.

Research has shown that CDHPs can lead to a reduction in healthcare spending, particularly among low and medium risk enrollees. These individuals may be more sensitive to out-of-pocket expenses and, as a result, are likely to reduce their use of non-essential healthcare services. By providing a financial incentive to consider both cost and necessity before seeking care, CDHPs typically result in lower overall expenditures for these groups compared to traditional health plans.

In this context, the effectiveness of CDHPs in encouraging smarter spending habits reveals why this choice is considered the correct answer. They aim to change consumer behavior by fostering awareness of costs, ultimately leading to more judicious use of healthcare resources.