As the number of health care plans expands and their costs increase annually, the American worker faces a conundrum: He must select a plan that best serves his family and one that targets his income bracket.
Sally Stephens of Spectrum Health Systems, an Indianapolis-based provider of health and wellness programs, says that the answer lies in becoming an informed health care consumer. This includes understanding the health needs of all family members and the true costs of providing medical services. The key is for employers to educate their workers about the expenses the firm bears in providing health coverage and encouraging employees to more actively manage their health.
Smart Business spoke with Stephens about ways employers and their workers can protect themselves in an era of rapidly increasing medical costs.
How is health care consumerism different from more traditional health plans?
Under managed care, employer sponsored plans controlled demand by limiting employee choice and decision-making through various gatekeepers. In this model, the plan paid the majority of the cost of health care services, leaving the employee only responsible for the premiums and small out-of-pocket co-payments, creating little incentive for managing consumption.
Consumerism strategies manage demand by educating employees about health care and costs and ensuring that employees pay a more meaningful portion of the cost of care. It seeks to make employees more accountable, knowledgeable, and actively engaged in managing their health by shifting their role from passive patient to active health care partner.
How does the consumer make health care choices that are best for him and his family?
Most employers and their health plans have insulated plan participants from the true cost of their health care and the financial implications of their choices. Because most employees seldom have the tools to fully evaluate costs, quality and effectiveness of care, there are few financial incentives to choose appropriate coverage and use it effectively.
Employees must fully understand their plan choice, how it works and how to effectively use the benefits. It is not enough to simply focus on the monthly premium contributions, co-pays and deductibles. Instead they need to be informed about the necessity and advantages of one service over another. Now employees must look at budgeting health care, much as they do with other expenditures. And it means being a true partner with their physician in determining the plan of care that is right for them.
What role does the employer play?
Today, employers recognize that better consumer behavior has the potential to improve the quality of care they receive while reducing future cost increases. While employers can’t be directly involved in making health care decisions for employees, they are looking at health care consumerism as a way to change employee behavior and promote more accountability for health care management and costs.
Providing plan participants with the information, skills and tools to meet their health care needs and expectations will empower them to make informed decisions, much as they do for other purchases.
What do employers need to consider when introducing consumerism to their employees?
Research is one critical component: understanding how much employees know about the rising costs of health care and the resources available to them as they become more accountable consumers.
Information access is another. In order to respond to market signals about the differential costs of preventive, routine, life-threatening, chronic and life-enhancing services, people need access to information about the true cost and quality of services.
Employees should be educated in careful, sophisticated ways, using successful consumerism initiatives and resources. Meanwhile, employers should be more active in talking about the connection between health and productivity. That means creating a communications strategy that builds a shared understanding between employer and employees.
Employers should also provide tools and resources to assist employees in managing and maintaining healthy lifestyle practices.
Why should young or otherwise healthy people be concerned about the quality of heath care their plan provides?
In recent years, everyone is focused on the increasing cost of their own health care. They care deeply about the kind of coverage they have available to them. Unfortunately, we live in a culture of entitlement where we feel we should have access to the highest quality of care at relatively no cost.
In a health care consumer model, an individual’s overall health care expenses will be directly proportionate to his or her level of health. Those who are healthy will have lower out-of-pocket costs then those who are in poor health. The most important thing an individual can do to manage total cost is to stay healthy.
SALLY STEPHENS is the founder, owner and president of Spectrum Health Systems. Reach her at (317) 573-7600 or [email protected].