POWERING CDHC
Information highway remains pivotal to increase patients' understanding of value
COST-CONSCIOUS and quality-conscious consumers have long exercised self direction in everyday buying decisions for a wide range of products and services.
However, when the time came to make decisions relative to healthcare, they often ceded control to their employers or others who doled out advice, but often without the necessary background to help others make important decisions.
That is no longer the case. A better educated population, buoyed by such resources as the information superhighway, made available through the Internet, is increasingly speaking up before medical treatment goes forward. And it is the tools that are provided by advanced technology that make those decisions easier.
Katherine H. Capps, president of Health 2 Resources, a Washington-based consulting firm that works with employers and healthcare plan suppliers for employers, says empowered consumers have embraced the concept of consumer directed healthcare, not only as a necessity and a convenience, but also as a right.
'They must have enough information to make themselves partners with providers,' Capps says. 'And the information must not be biased nor an attempt to steer them in a particular direction. It must be evidenced-based, and it must be ongoing so that they can manage their own health.'
A study by Watson Wyatt and the National Business Group on Health has shown that companies that encourage their workers to take responsibility for rrealthcare decisions are having greater success at controlling costs.
This ninth-annual survey shows that these companies expect a median 7% increase in healthcare costs, while companies that fail to encourage workers to make healthcare decisions are seeing increases as great as 17%.
'A difference of 10 percentage points is hard to ignore,' says Ted Chien, global director of group and healthcare consulting at Watson Wyatt. 'The results of this study strongly suggest that employers with programs that encourage employees to be more responsible for their healthcare decisions are beginning to reap the rewards.'
The study also concluded that traditional methods of attempting to control costs are no longer useful. Companies are less willing to absorb premium increases than they have been in the past, and fewer employers are trying to contain costs through changes in plans, pharmacy benefit administrators or vendors.
A recent study of 14,000 members of the Aetna Health Fund showed that there has been a positive impact from plans that engage consumers in healthcare decisionmaking.
According to Ronald A. Williams, president of Aetna, the consumer-directed aspects of the company's Health Fund appear to encourage more active member engagement in the making of decisions.
Medical costs for members stayed relatively flat, rising 1.5% in 2003 over 2002, while use of preventive care increased 16% more than in a similar population. For members in an integrated pharmacy plan, the decision to use generic medications increased 12.8%.
'We're very encouraged to see that healthcare consumerism can be a positive force in the marketplace,' Williams says. 'Healthcare consumerism is about putting more of the decisions in the hands of the consumer, and providing them with useful tools and information that allow them to make the decisions more comfortable.'
The conclusion drawn by Aetna is that its survey shows consumers can and will manage their healthcare spending responsibly, and will not be deterred from seeking necessary care when they control the spending decisions.
Also, fund members take greater advantage of consumer tools and information, including the company's own online suite of information about physicians, medications and healthcare providers. Members are able to rate their own doctors online and view their live account balances for their health funds.
Helen Darling, president of the National Business Group on Health, says employers recognize that a new reality requires new choices.
'Employers and employees must work together to control health benefit costs,' she says. 'The only viable way for employers to break the log jam may be to help workers become more educated consumers of healthcare.'
INTEGRATED EFFICIENCY
Gail Knopf, senior vice president of The Trizetto Group, said there is no longer any other option: Companies must use advanced technology to support the complexity of consumer-directed health care options.Trizetto, which is based in Newport Beach, Calif., provides administrative software and services to the healthcare insurance industries.
'The best way to help consumers in decisions about healthcare is to provide products that offer comprehensive information,' Knopf says. 'There has to be in place health plan administration with complete comprehensive tools that support billing for premiums, claims processing and can provide information for consumers.'
Trizetto's integrated system can administer consumer-directed product such as health reimbursement accounts and flexiblespending accounts.
'The consumerdirected products movement is clearly the result of the high premiums faced by employers,' Knopf says. 'In the 1980s, the reaction was to come in with managed care that encouraged health and wellness and minimized unnecessary use of medical services.'
However, consumers reacted poorly to being restricted in their uses of medical services. The result was an increase in medical costs and the ensuing increase in insurance premiums.
'This time, the double-digit premium increases brought a response that gave consumers the responsibility of establishing the direction of their healthcare,' Knopf says.
Employees have migrated from a wholesale approach for healthcare to one that is more retail.
'If you spend 30% to 40% out of your pocket for healthcare, you pay more attention to it,' Knopf says.
Now there is also a movement toward more transparency related to costs and how they are determined. Also, there is more information available to consumers as to where they can obtain the highest quality care.
'Healthcare, though, is very complicated and insurance companies must be able to provide for their customers the information necessary to enable this decision making,' Knopf says. 'They must have software that is comprehensive. The consumer-directed movement is here to stay, and insurers and employers must be able to handle the administration of it in a seamless integrated manner that helps differentiate them in the marketplace.'
'Consumer-directed plans are moving us in the right direction by controlling costs and encouraging consumer engagement,' says Greg Scandlen, director of the Galen Institute's Center for Consumer Driven Health Care
Capps, of Health 2 Resources, says companies must willingly increase the use of technology to provide information and reduce costs. MHE
[Sidebar]
Employers and insurers must be able to handle the administration of consumer-directed healthcare.
[Author Affiliation]
Robert A. Nozar is a freelance writer based in Cleveland.
