Consumer-Driven Health Plan Design Imperatives

1. Structure. The structure must be designed to provide real cost-savings and to encourage employees to take a conservative approach to spending. For example, some plans bundle prescription drugs into the items covered by the personal accounts to encourage prudent use. Coldwell also recommends that employers offer flexible spending accounts to help employees meet out-of-pocket health-care costs with pretax dollars. Another important structural consideration is the choice of networks. "Effective networks are critical to long-term cost-savings," he says.

2. Patient education. Especially when employees have more responsibility for health-care costs, disease-management programs are critical. "Employers can offer nurse help lines and proactive screenings for prevention and early treatment of costly illnesses," Coldwell says.

3. Information on quality and costs. Some consumer-driven plans offer a tiered network of PPOs, with each tier representing a separate care system differentiated by specific quality standards and costs. In the absence of a tiered network, employers can provide Web-based information to help participants select high-quality, cost-effective hospitals and physicians.

    Coldwell says that a carefully designed consumer-driven plan with the right network can save employers 20 percent in the first year, and year over year, the trend increase is lower. Human resources can reduce adverse selection by slotting the consumer-driven plan as the middle offering, with a less expensive catastrophic-coverage plan below and a more expensive traditional PPO above. "Make sure that the consumer-driven plan is not the cheapest option," he says.