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Consumer-Directed Health Care

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Updated December 31, 2008

Definition:

Consumer-directed health care is a type of healthcare financing designed to reduce health spending by providing a financial incentive for consumers to choose the best healthcare value.

One example of a consumer-driven health plan is the health savings account (HSA), linked with a high-deductible health plan. Monthly premiums are generally lower than traditional health plan premiums, leaving consumers with greater control over -- and responsibility for -- their health spending. The high deductibles and out-of-pocket costs give patients an incentive to learn more about the cost and quality of care before spending.

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