August 17, 2006
Health care consumerism: what you need to know
Healthcare costs in the U.S. continue to rise after a decade of unprecedented growth. Hoping to encourage a turnaround, many employers are quickly turning to a new trend in providing employee healthcare benefits: consumer-driven health plans. Consumer-driven health plans are employer-sponsored health benefit programs that aim to educate employees about the true costs of medical services, and whose goal is to hold employees more responsible for their medical care purchase decisions.
These new plans require a more educated patient, who - in theory - will become financially responsible for more of the real costs of healthcare services. Employers who offer these types of plans hope that better, more efficient use of healthcare services on the part of their employees will create a downward shift in both demand and cost for healthcare over time.
Ultimately, consumer-driven health plans are more than just a few specific types of health plan “models.” Rather, the entire consumer-driven movement relies upon the introduction of a wide spectrum of “consumerism” elements that, coupled with a formal employer-sponsored health plan, will encourage employees to assume a greater role in managing their own health and the associated costs. “Consumerism,” as it relates to healthcare, can range from simply offering employees the ability to choose among a few different health plans, to providing vouchers for employees to purchase their own individual health plans on the open market. Whatever the case, consumer-driven health plans can only work when a variety of peripheral financial incentives and informational programs are introduced - such as preventive care services, wellness and disease management programs, and provider cost and quality information - that provide employees with the tools they need to make the most value-driven choices.
The most common consumer-driven health plan pairs a health savings account (HSA) with a high-deductible insurance plan. Employers and employees make pre-tax contributions to the HSA, which can be used to pay for routine and preventive medical care. The insurance portion provides coverage for catastrophic or high-cost events. Typically, any unused amounts in the savings account can be rolled over and used in subsequent plan years.
Other types of plan models exist, but are not as prevalent. The key component of any type of consumer-driven health plan remains: employees must be provided with a set of tools to help them understand the complex healthcare system. Often, additional design features include a separate benefit for preventive care coverage and/or for certain medications to treat chronic conditions.
For more information, contact Mike Turney at 614/326.4875 or firstname.lastname@example.org. HRH is the endorsed insurance agency of the Columbus Bar since 1989.