With health care costs continuing to grow substantially faster than inflation, increasing by almost 8 percent in 2004, many employers have been forced to reduce benefits, shift more cost to employees or drop coverage entirely. Less than two-thirds of all employers now offer health insurance to their employees. One approach to addressing these issues is making consumers aware of the cost of the care they are receiving.
Consumerism raises an individual’s awareness of the real costs of health care and provides them with opportunities for greater decision-making control over their health care spending. Research has shown that total health spending is reduced when consumers bear more responsibility for their health care expenses. More than 3.2 million Americans are now covered by a consumer-directed health plan.
“Consumerism in health care is based on the idea that individuals should have greater control over decisions affecting their health care,” says Bill Berenson, vice president of sales and service for Aetna’s North Central region. “It’s about engaging employees as consumers and helping them to better manage the costs of their health care.”
Smart Business spoke with Berenson about consumerism, consumer-directed health plans and how employers can best present these plans to employees.
How does consumerism in health care work?
The plan design is one facet of the consumerism solution. Innovative plan designs with a high deductible promote awareness, motivation, employee control and involvement with their health care spending. Consumer-directed health plans (CDHPs) typically consist of three major components: an underlying high-deductible plan that includes preventive care not charged against the deductible, a health fund or savings account that helps members pay for out-of-pocket medical expenses, and access to information and tools that can help consumers make better health care decisions.
CDHPs also can provide additional options.
- They give individuals access to tools and information that help them to make informed decisions about treatment and provider options.
- They increase consumer involvement and raise awareness about the real cost of health care, which research has shown to reduce total health care spending.
- They offer lower monthly premiums, making it more affordable for employers to provide coverage and for individuals to purchase it.
- Consumer-directed products can help encourage healthy behavior. For example, under many plans enrollees do not pay out-of-pocket for routine physicals, child immunizations and routine prenatal care.
Is consumerism in health care just a way for employers to get individuals to pay a greater percentage of their health care costs?
Consumerism is not cost-shifting in disguise. Premiums in consumer-directed plans are often more affordable than traditional plans, meaning more individuals can obtain coverage. We have found that consumer-directed plan enrollees have demonstrated as much as a 23 percent increase in the use of preventive care, which may improve health and save money.
How do you successfully involve employees in consumer-directed health care?
Developing consumer involvement requires educating employees about consumer-directed health benefits and insurance plans. By educating employees about the true cost of health care, and providing the tools and information they need to make informed decisions, employees feel more empowered to take an active role in their health care.
So much reference is made to an engaged consumer — what does that mean?
An engaged consumer is one who takes a proactive approach to their health and to the management of its costs. The engaged consumer spends health care dollars wisely, because the money is theirs and they want to make sure it is spent properly.
The cost of health care is not always indicative of quality; an engaged consumer is one who considers cost as well as quality when selecting their providers. Finally, the engaged consumer wants information so they can more effectively participate in the process. If they are ill, they want to understand the nature of their illness and the treatment options available to them.
What is the best way for an employer to present a consumer-driven health plan to employees?
Ultimately, an employer wants all employees to be empowered to choose well, be well, get well and plan well. Consumer-driven health plans help equip employees with the information needed to become more confident health care consumers.
Many different consumer-driven health plans exist, so employers should ask their health carrier or broker/consultant what the best options are for them and their employees. The broker or consultant can help the employer find the best plan(s) available, along with the tools and information the employees or the employer need to make the right health care decisions.
Bill Berenson is vice president of sales and service for Aetna’s north central region. Reach him at (312) 928-3323 or [email protected].
