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Enrollees Give Low Marks to Consumer-Driven Plans

February 7, 2006
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Employers that are on the fence about introducing consumer-oriented health plans may want to consider results of a recent study from the Employee Benefit Research Institute and the Commonwealth Fund. It indicates that enrollees in consumer-driven health plans and high-deductible plans tend to be less satisfied than those in conventional health plans. A high-deductible plan was defined as one that does not have a health savings or health reimbursement account attached to it.

The difference is pronounced--63 percent of individuals with conventional health insurance said they were extremely satisfied or very satisfied with their plans, compared with 42 percent of individuals in consumer-driven plans and 33 percent of enrollees in high-deductible plans, says Paul Fronstin, director of the Health Research and Education Program at EBRI and co-author of the study.

Meanwhile, Alexander Domaszewicz, consumer-driven health care specialist at Mercer Human Resource Consulting, says he has seen studies that diametrically oppose the satisfaction rates found in the EBRI analysis. No two consumer-oriented health plans are identical, which would explain the variation in satisfaction rates, he says. "The devil is in the details," Domaszewicz says.

He says that by lumping both full-fledged consumer-driven programs and stand-alone plans that carry no health reimbursement arrangements or health savings account into the same survey, the EBRI study could inadvertently create a confusing association between the two. That association could skew the perception of these products.

For purposes of this study, EBRI defined consumer-driven plans as those that have deductibles of at least $1,000 for singles and $2,000 for families and include an HRA or HSA component. High-deductible plans were defined as those without a savings or reimbursement account but that nevertheless carry deductibles that are high enough to qualify for tax benefits.

"Genuine consumer-driven plans are very different from stand-alone plans. You wouldn’t compare paintball with going to war," Domaszewicz says.

Nevertheless, the dissatisfaction found in the EBRI study could signal potential hurdles that employers should watch out for. For one, generating good buzz about the new programs may prove to be tricky because participants in consumer-driven programs are hesitant to recommend them. Only 34 percent of enrollees in consumer-driven plans and 22 percent of those in high-deductible plans said they would be extremely or very likely to recommend their health plan to a friend or a co-worker. That’s much lower than the 50 percent of individuals in conventional plans.

In addition, the prospect of retaining enrollees in consumer-driven and high-deductible plans could also be challenging, according to the EBRI study. If given the opportunity to switch health plans, only 46 percent of those in consumer-driven plans and 30 percent of participants in high-deductible plans said they were extremely likely or very likely to stay with their current plan--a marked difference from the 60 percent of participants who are in traditional health plans.

The results should not necessarily deter employers from introducing consumer-oriented programs, but should instead serve as a catalyst for careful planning, Fronstin says. There are several important lessons that companies can draw from the study to ensure that they design programs that are successful and enduring.

Fronstin warns employers against mitigating the financial burden of expensive health care by merely shifting the responsibility to employees. "If the sole goal is to shift costs, these plans are not going to work," he says. A more strategic approach is to design plans that provide top-notch services and a broad array of specialists--two areas in which both kinds of plans performed poorly in the survey.

But perhaps the study’s most important call to action is for employers to provide information tools that are more powerful and precise, Fronstin says.

"In theory, consumer-driven plans are intended to heighten cost sensitivity and the quality in people’s decision-making process. Yet there is a deficit of tools for allowing this to happen," he says. Just 12 percent to 16 percent of enrollees in all plans said they have access to information on doctors and hospitals.

The scarcity of information platforms to help consumers make educated decisions about health care is disconcerting, says Suzanne Delbanco, CEO of Leap­frog, a company that collects quality-of-care information about health providers and disseminates it to consumers. Some of the most needed tools are those that help to shed light on the pricing of services, as well as those that help people find qualified doctors and hospitals. "The importance of creating a clear and transparent environment so that people can make informed decisions is crucial," she says.

--Gina Ruiz

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