4 Tests For Sorting The Real Consumer-Driven Plans From The Wannabes
Consumer-driven health plans are growing in popularity all over the United States, providing employers and enrollees with a less restrictive, more affordable alternative to managed care.
Many health insurance companies now are offering CDHP products, and for good reason: Nearly a third of employers plan to introduce them in the not-too-distant future. Within a few years of their appearance in the market, CDHPs already cover more than 1 million Americans.
Employers like CDHPs because they help reduce health insurance premiums by getting employees to take an interest in the cost of care. This employee involvement often is perceived as a vital necessity during these times of 15% per year increases and with almost half of smaller businesses experiencing increases of over 30%.
The CDHP model still is evolving, with models displaying varying levels of consumer involvement. But the best plans ultimately do 2 things well: provide incentives for members to factor cost into their health care decisions, and empower them with doctor quality and cost information they need to make savvy decisions.
So what distinguishes a true CDHP plan from a “wannabe”say, a run-of-the-mill high-deductible plan paired with a spending account?
Here are 4 questions that can help you recognize the real thing.
1. Does the plan provide “price transparency”?
“Price transparency” is the cornerstone of the CDHP model, helping enrollees shop for the best health care in the same way that they would shop for any other item of importance.
A truly consumer-driven plan will encourage members to visit its Web site. Members should be able to use the site to search for the prices that doctors and hospitals charge for various services. This information should be made available telephonically as well, to aid those without computer access.
Ideally, the provider cost displays should make it easy for an enrollee quickly to gain a general impression of a doctors relative cost and then for the enrollee to dig deeper into the costs for a given type of service, such as a routine visit or a visit for a particular problem.
The site might even offer information about the cost of specific procedures. Its difficult to administer the delivery of all this information, especially when the CDHP provider has older, legacy IT systems. But, because price transparency and a consumer-friendly display are fundamental to any CDHP, even some of the traditional carriersoften laggards in technologyare either building a new IT infrastructure or buying systems (or companies) designed to meet this crucial need.
2. Do members get personal health care spending accounts?
The second key feature of the CDHP model is a personal spending account for each member.
Insurers know consumers are bound to make smart health care choices if they feel a sense of ownership over the money spent, and so CDHP plans set up spending accounts and ask enrollees to manage them as they would their own bank account. These accounts come in many configurations, some designed by the carriers and some designed by legislation.
The best CDHP plans operate on the premise that consumers must “know before they go,” and that they should be free to select the services they want by making the sort of value purchases that come naturally to consumers in every other marketplace. A spending account fosters a value-driven purchase by creating an incentive to spend wisely.
Personal health accounts are also a test for the effectiveness of a plans price transparency system. By entrusting consumers with their own funds, CDHPs actually are holding enrollees accountable for controlling costs.