Benefit Innovators

Health Benefits and

Actuarial Consulting

 

 

Please enjoy our blog and we do encourage relevant comments and feedback.  If you are a group health broker or consultant that could benefit from providing your clients enhanced analytical and cost information about their benefits, please check out the rest of our website.  We work behind the scenes to help you provide your clients better information to make decisions with.

Consumer Driven Health Plans, by Brad Vernon

Over the last month or so I have been asking the question on LinkedIn groups and in a poll (view my profile) of what is most important to controlling the cost of healthcare in the future.  Answers included tort reform, eliminating errors and wasteful procedures, wellness initiatives, and a lot of political opinions of course.  But the one subject that came up more than any other was the idea of consumerism.  Empowering us as consumers to make good decisions about our healthcare purchases seems to be something most agree on as a staple to improving our healthcare system here in the U.S.  Better information, better aligned incentives, and a system that allows us as consumers to make the right decision is all part of the solution.  Of course, this alone won’t solve our healthcare cost crisis, all of the methods to improve our system I mentioned will be important to fixing our problems.  But a lot of it depends on big changes that will take time, effort and resources to make any impact.

One small step that can be taken towards better consumerism today is the use of consumer driven health plans (CDHPs).  It isn’t the solution to the problem, but it is a move in the right direction that any employer can make right now.  Most commonly this means the coupling of a high deductible insurance plan along with a health reimbursement account or health savings account.  Regardless of which is chosen, and they each have their benefits and negatives, the idea is to have consumer directed funds to close some of the gaps of the high deductible plan. 

In my opinion the best designed CDHPs today provide three major things to employees.  The first is the incentive to make good decisions, which properly designed CDHPs provide because the consumer is making purchasing decisions with money that is, to some degree, their own.  The second thing needed is good information to make these decisions.  This is an area where I believe we have failed as a society so far.  The information available to make informed decisions is sparse, confusing and sometimes completely wrong.  Little information is available on the cost of services at a hospital or other provider and providers themselves are rarely well equipped to help a patient make a decision that properly takes into account cost.  The final thing I feel is important to a good CDHP program is some sort of wellness program.  It could be as simple as periodic communication on healthy habits, but once you have employees involved financially in the cost of their healthcare decisions they will better see the repercussions of their lifestyle choices and be more incentivized to improve their own health.  A wellness program gives them even more incentive and opportunity to act on it.

 

I am a big proponent of CDHPs as I described them, because I think they are an immediate change an employer can make today that saves them and their employees money, and gets their workforce involved in the issue of rising healthcare.  As I said, it isn’t the end of the story, and as the debates go on in public forums of all types around what we need to do to fix our nation’s healthcare crisis, it seems like a small drop in a huge bucket, but why not take a baby step that can do a lot of good.  Healthcare consumerism doesn’t work as well as it can, and a big reason is the lack of information available to consumers, but the article linked to below is a great example of the fact that it can work, even before we make the drastic changes needed to the system.

It is not easy being a patient-consumer, but it can be done

Add a Comment

(Enter the numbers shown in the above image)