Consumer-Driven Health Plans Add Disease Management Incentives

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Agents who sell the new “consumer-driven” health plans can expect to see a wave of features and programs aimed at plan members who already have medical problems.

Some plans will add traditional disease management programs in 2005 and 2006, but other plans will introduce financial incentives to encourage members with conditions such as diabetes and high blood pressure to “do the right thing,” says Steven Kraus, a health benefits expert in the Chicago office of Deloitte Consulting L.L.P.

Today, “consumer-driven health plans have to be attractive to people who are sick as well as people who are healthy,” Kraus says.

In 2000, Kraus says, employers talked about “defined contribution plans,” or employer efforts to limit their costs by contributing a fixed amount of cash for each employees health benefits.

The next generation of plans combined high-deductible health coverage, personal health accounts and decision support tools.

But employers discovered that, even with the new decision support tools and financial incentives to cut down on waste, patients who belonged to the consumer-driven plans had a tough time getting accurate retail price estimates for open heart surgery, let alone bargaining the cost down.

In 2003, the consumer-driven plans responded by bringing back traditional managed care networks and improving Web-based health care shopping content, Kraus says.

Many benefits managers who have added consumer-driven plans seem to like them.

Some studies conducted by opponents of the consumer-driven plan concept suggest that the plans save no money or simply drive up costs for sicker plan members, but a recent Deloitte survey of 60 consumer-driven plan sponsors found that most are happy with the plans.

Although 52% of the managers whose companies have consumer-driven plans agreed that the new plans “have complex and confusing designs,” 76% said the plans “change employee purchasing behavior” and 47% said the plans “result in immediate employer cost savings.” Another 42% argued that the plans help sick employees as well as healthy employees.

More than 80% of the 37 companies that have had consumer-driven plans in place for more than a year reported that consumer-driven plan enrollment increased between 2003 and 2004.

Now, Kraus says, in addition to providing new incentives for sick patients to manage their care better, consumer-driven plans are promising they will give sick patients even more information about what kind of care to get, which doctors and hospitals provide the best care, and how to find their way through the health care maze.

“I believe [the programs] will be able to deliver on that promise,” Kraus says.

So far, though, Kraus sees no serious, large-scale efforts to sell harried plan members the services of case managers who would take over the many hours of legwork involved with getting in-network treatment for a broken wrist or a complicated pregnancy and dealing with the ensuing avalanche of correspondence from doctors, testing labs, radiologists, clinics, hospitals and insurance companies.

Kraus also sees no serious, large-scale efforts to give consumers more control over health care pricing by persuading all of the providers who handle a complicated episode of care to get together to send out one simple, unified bill.

For now, if consumers paid for cars the way they pay for health care, theyd have to send out a separate check for each bolt, Kraus says.

To eliminate the bill avalanche problem, “the payers and the providers are going to have to agree on how they want to reform that payment process,” Kraus says.

Payers and providers could work on some initiatives to simplify billing on their own, but the federal government might be able to speed up the process by revising the entire billing system, he says.


Reproduced from National Underwriter Edition, September 9, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.