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Consumerism Still Not Living Up to the Name

April 10, 2008
Related Topics: Benefit Design and Communication, Workforce Planning, Featured Article
Vendors, employers and employees alike are now well aware that the "consumer-driven" part of the consumer-driven health care label is largely a misnomer. Vendors launched these plans with virtually no infrastructure in place to support the stated goal of creating more informed consumers. With the federal government, state legi­slatures, aggressive busi­ness groups and corporate clients now breathing down their necks, vendors are scrambling to provide the missing data. The tools for real "consumer-driven" plans, however, are still years away.

    Idaho Power remains thoroughly frustrated in its effort to use its consumer-driven health plan to build savings over time.

    "There are no good tools out there for consumerism," says Cindy Anderson, manager of health and disability benefits. "We have an extensive communications program to help our employees dig down about costs with their providers, and we’ve been pounding on our Blue Cross/ Blue Shield plan for the tools, but it tells us that their contracts with their pro­viders prohibit price transparency."

    The only pricing data available at Idaho Power is from Medicare, and the information is weak. "We are telling employees that providers will have to supply the pricing information themselves," Anderson says. "This is a struggle. It may take five years before we see the tools we need."

    The TriZetto Group provides its employees with a benefits estimator at the enrollment stage to help them decide if the company’s consumer-driven plan is a good choice, and the vendor supplies a treatment cost estimator, pharmacy cost estimators and access to wellness and prevention tools. Still missing, however, are the price data and detailed quality comparisons that employees need to become fully informed. "For the real tools that employees need, we’re two years out," says Alan Heikkala, vice president of human capital management.

    For now, most consumer-driven health plans cut costs only through reduced utilization.

"This is a struggle. It may take
five years before we see the
tools we need."
—Cindy Anderson, Idaho Power

    "Utilization is about half the total health care cost increase; price inflation is the other half," says Blaine Bos, a Mercer partner. "The network approach, which has been in place for decades, is supposed to address the price inflation portion in contracts. The next frontier for this is transparency so we can identify the most cost-efficient and highest-quality providers."

    The missing element is a combined government and private-sector effort to create a database that identifies the most efficient and highest-quality policies and practices.

    "We can expect to see public domain databases with this information by about 2012," Bos predicts. "At that time, we should be able to measure most practitioners in most metropolitan areas."

    President Bush issued an executive order on August 22, 2006, that directs federal agencies to increase pricing and quality transparency, and 30 states have passed or proposed legislation requiring steps toward transparency. Some insurers are providing pricing for common procedures in specific locations, but the data are uneven and incomplete.

    In the meantime, some employers and experts now refer to consumer-driven health plans as high-deductible health plans because the high deductible is really the defining characteristic of these plans, and the driving force in reducing utilization. Towers Perrin refers to them as account-based plans.

    The nomenclature remains unstable, but dropping the "consumer-driven" element may help lower expectations that cannot yet be met.

Workforce Management, April 7, 2008, p. 28 -- Subscribe Now!

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