While the theory and empirical evidence regarding the impact of CDHPs on spending in the
short term is clear, the longer-term impacts are less certain. Conceptually, higher deductibles and
the associated increase in out-of-pocket costs suggest that patients will reduce their health care
spending in the short term. Not surprisingly, there is robust empirical evidence that CDHPs
effectively incentivize patients to change their health care use and reduce costs in the first year
after introduction (e.g. Buntin et al. 2011; Lo Sasso et al. 2010). However, the effects of CDHPs
on spending in the longer term are a priori ambiguous and the empirical evidence on the long
term effect of CDHPs on spending is limited (Fronstin et al., 2013; Borah et al. 2011; Wharam et
al. 2011). In this paper, we address this gap in the literature by describing a theoretical
framework for long term impacts and empirically evaluating the long term effects of CDHPs on
health care spending. We do the latter by analyzing up to 3 years of data post-CDHP offer from
54 large employers, half of which offered a diverse set of CDHPs to their employees. By
investigating a diverse set of firms, we are able to analyze heterogeneities in long term CDHP
impacts by CDHP plan structure.