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February 24, 2017

Low- and high-wage workers use their health plans differently, study finds

Daily Briefing

Lower-wage workers covered by an employer health plan are significantly more likely to be admitted to the hospital or visit the ED compared to higher-wage workers, according to a new study published in Health Affairs.

Study details

The study examined 42,936 employees of four self-insured companies. The data, which was from 2014, included information on earnings, demographics, and health care utilization. The study divided workers by income, including those with annual wages of:

  • $24,000 or less
  • Between $24,001 and $30,000;
  • Between $30,001 and $44,000;
  • Between $44,001 and $70,000; and
  • At least $70,001.

When compared with the highest workers, study found the lowest-wage workers had:

  • About half the usage of preventive care (19 percent versus 38 percent);
  • About two times the rate of hospital admissions (31 per 1,000 individuals versus 17 per 1,000 individuals);
  • About four times the rate of avoidable admissions (4.3 per 1,000 individuals versus 0.9 per 1,000 individuals); and
  • More than three times the rate of ED visits (370 per 1,000 individuals versus 120 per 1,000 individuals).

In contrast, the highest-wage workers had higher utilization rates for almost all outpatient categories of care and comparatively lower rates of hospitalization.

2 tactics for segmenting your access expansion strategy

Overall, the study found that the highest-wage workers spend the most, per patient, on health care in the Unites States ($5,074 per year) followed by the lowest-wage workers ($4,835 per year). Workers in the middle-income bracket were the least likely to misuse or overuse health care services, according to Healthcare Finance.  


According to Bruce Sherman, an assistant clinical professor at Case Western Reserve University and the study's lead author, it isn't clear why lower-wage workers consume health care in a different way than their higher-wage colleagues.

But with more workers enrolling in health plans with a deductible greater than $1,000, the growing burden of out-of-pocket costs may be preventing some lower-wage workers from proactively seeking care in a primary or other non-acute care setting, according to Kaiser Health News.

Lower-wage workers also frequently have less flexible work schedules, which may limit where they can seek care. Bruce Sherman, an assistant clinical professor at Case Western Reserve University and the study’s lead author, said, "Individuals are penalized if they leave work to seek care. So they go after hours and their access to care is limited to urgent care centers or emergency departments."

The authors say that new incentives and benefits could help nudge lower-wage workers into changing their patterns of care. For instance, health plans could cover care for chronic conditions without a deductible, they suggest. And employers could invest in more health-related incentives for such workers or vary premiums and deductibles by earnings.

Sherman also added that "health literacy" was important. "Some focus groups I've participated in, employees have said, 'I understand the services are free, but if an abnormality is found that requires further services, I'll have to (pay for it). So because I feel fine, I'm not going to go'" (Andrews, Kaiser Health News, 2/17; Lagasse, Healthcare Finance, 2/16).

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