Smart Shopping: Maximizing Employee Health Dollars

    Advocates of consumer-driven health plans argue that savvy employees, particularly when their own money is on the line, will research more about the cost, quality and the underlying necessity of the health care they use. In theory, employees will indulge in fewer doctor visits for minor ailments or Cadillac antibiotics for generic-model colds.

    The problem, though, is that while a wealth of medical resources are just a few key strokes away--typing "migraine treatment" into Google reaps 44,000 hits--some of the most vital information, such as cost comparisons between hospitals and doctors, remains scarce to nil. "A lot of health care providers today can’t quote prices," says Paul Mango, practice leader for the North American Payor Provider Practice at McKinsey & Co.

    More employees must enroll to spur a market for cost and other comparative information, says Chris Calvert, a senior health consultant at the Segal Co. But, Calvert says, "You need to have (quality) information to get people to jump into these plans in droves."

Meeting the demand
    With at least 1 million Americans using health savings accounts, according to America’s Health Insurance Plans, a national association of insurers, some organizations are moving to fill this need for consumer health information.

    In mid-August, Aetna officials announced a pilot program in the Cincinnati area to dispel the mystery surrounding physician pricing. The pilot, which officials at the insurer describe as the first of its kind, will provide Aetna enrollees online information about the cost of 600 distinct procedures provided by 5,000 physicians and physician groups in its local network. Calvert, who calls the Aetna move "a critical next step" in consumerism, says many insurance companies already provide the average cost of a procedure, such as a Caesarean section, but do not break it down by local physician or hospital.

    Meanwhile, a bevy of other groups--from nonprofit organizations to federal agencies--are providing better snapshots of what constitutes high-quality and cost-effective treatment. For the past few years, a coalition of large employers called the Leapfrog Group has been refining an online resource that employees can use to check the number of heart bypasses and several other surgeries their local hospitals are performing.

    Consumers Union has also launched a drug resource that allows users to compare the relative cost and effectiveness of common medications. In some cases, users can save as much as $1,000 annually by switching to another medication in the same drug class, says Gail Shearer, director of health policy at Consumers Union. Shearer suggests that employees approach their physician with the data in hand. "In a nonconfrontational way, open a conversation," she says. "Many times doctors aren’t aware of these price differences."

Health resources and pitfalls
    Eight out of 10 Americans use the Internet to access health information, according to a recent survey by the Pew Internet & American Life Project. The searches have become more sophisticated, according to Susannah Fox, Pew’s associate director. Thirty-one percent of those surveyed in November 2004, for example, reported using the Internet to research health insurance options, compared with 25 percent two years earlier.

    Marlene Porter, head of information services at the Medical University of Ohio’s R.H. Mulford Library, says that employees could benefit from some tips on how to critically search because their confidence sometimes outpaces their expertise. Porter advises employers to provide medicine-specific alternatives to general search engines, such as one operated by the National Library of Medicine. She also suggests that companies encourage employees to evaluate the relevance and source of the Web pages they stumble across.

    Fox agrees, pointing to a 2002 Pew survey finding that only one-fourth of health information seekers consistently check a Web site’s date and source. "What was the cutting-edge breast cancer therapy or estrogen replacement therapy two years ago is a completely different story now."

    The biggest risk, though, is not meeting employees’ growing hunger for useful medical information, Mango says. A McKinsey analysis of the experiences of more than 1,000 employees in consumer-driven health plans, released in June, found strong evidence of dissatisfaction with the level of provider information. The vast majority of employees, 80 percent, said that there was insufficient detail available regarding physician charges.

    "Fundamentally these (consumer-driven) plans are very sound in terms of what they are trying to do," Mango says. But he worries that without sufficient cost and quality resources, the plans will encounter the sort of employee resistance that stymied HMOs when they were first introduced. "The last thing we want is for these plans to be tagged with an HMO-like moniker because employees are frustrated that they aren’t getting the information they need early on to make these (health care) decisions."