A t the time Whirlpool first offered a consumer-driven health plan for 2004 enrollment, company officials outlined their position in stark terms.
To continue offering good health coverage to some 24,000 U.S. employees, Whirlpool would have to revamp its approach. Employees would be asked to meet the company halfway. "We talked about a consumer-driven plan being a shared responsibility," says Janice Pushaw, director of global benefits strategy. "That it’s good for you and good for Whirlpool."
David Whitwam, then-CEO of the Benton Harbor, Michigan-based company, made a video targeted to salaried employees. The head of North American operations also put his support on tape, speaking to hourly employees, who comprise about 80 percent of the company’s workforce. The communication effort, launched two months before the annual enrollment period, included newsletters, fliers and a financial tool to help employees project their health costs for the upcoming year.
When employee selections were tallied, 40 percent had bought into the consumer-driven approach, despite any built-in financial incentives. By 2005, 55 percent had signed on, choosing one of the two consumer-driven plans and their associated health reimbursement accounts over the company’s traditional PPO. Definity Health, which was acquired late last year by UnitedHealth Group, administered the plan. Financial incentives may have played a role that year; the PPO’s monthly premium was increased.
But Whirlpool officials also tout one strong sign of employee satisfaction: More than 95 percent of those who selected one of the consumer-driven options the first year re-enrolled for 2005.
Success stories like Whirlpool’s still remain the exception, says Stephen Parente, assistant professor in the finance department at the University of Minnesota’s Carlson School of Management. Parente, who studies consumer-driven plans, says that initial employee buy-in usually doesn’t significantly surpass 10 percent unless the employer pushes the option "over and over again,’’ as Whirlpool did. Successful employers, he says, also provide a fairly generous benefits package.
At Whirlpool, the two plans cover an annual physical and related preventive tests, such as mammograms. Without preventive coverage, Pushaw says, "you are putting yourself out there on the hook for catastrophic care." Employees also are assured that a health advocate will be available to assist them with complex health decisions.
Ryan Ralston, a Whirlpool global risk manager and father of four, signed up his family after running the numbers himself. "I threw in some worst-case scenarios--what if we had a severe illness?--and it still worked out better" with a consumer-driven choice, he says.
In the months since, Ralston has become more price-sensitive. When their son developed a fever and scratchy throat, Ralston and his wife agreed to a strep test. But they decided to postpone any additional testing after the strep results came back negative. "We said, ‘Let’s see how it plays out,’ " says Ralston, whose son soon bounced back to health.
But Ralston says cost concerns didn’t discourage him from seeking emergency room help when he developed flu-like symptoms, a severe headache and weakness in his joints—to the point that he had difficulty standing. He was hospitalized several days with viral meningitis.
True, he admits now, he should have gone to the hospital sooner. "But that was not a financial concern," he says. "That was my own stubbornness."
At this point, savvier health decisions made by employees have curtailed Whirlpool’s health costs. As of early August, the company this year had paid 15 percent less per employee in its consumer-driven plans than it had for those in the company’s PPO, Pushaw says.
If Ralston’s perspective is any indication, some employees are willing to do their part, shouldering more personal accountability for health spending choices.
Workforce Management, September 2005, pp. 59-60 --Subscribe Now!