he leaders of Cummins, a manufacturer of power generation equipment and systems, knew
that some of their employees might be reticent to explore the unknown world of
consumer-driven health plans unless the company provided a few guideposts.
So the Columbus, Indiana-based company invested in a Towers
Perrin financial modeling tool that helps employees run cost comparisons. By
answering a series of questions flashed on a computer screen, employees could develop
a rough picture of their out-of-pocket health expenses for the upcoming year, broken
down by plan.
To sweeten the deal, Cummins officials also committed to
depositing $100 into the health flexible spending account of every employee who
test-drove the financial tool. About half of the 10,000 eligible employees did so,
says Jill Olds, director of benefit strategy. Roughly the same number, 46 percent of
Cummins’ eligible employees, selected one of the two consumer-driven plans with
health reimbursement accounts for 2004 instead of the third option, a managed care
plan.
"In 2003, consumer-driven health plans were frightening for
employees," Olds says. "And, to the extent that we were able to provide them a tool
to model their own experience, that was helpful for them."
Compared with the typical managed care plan, in which employees
don’t have to consider much beyond meeting the co-pay, consumer-driven health care
can appear to be rife with decisions.
Do you really need to get that shoulder checked out? Which
doctor should you consult? How expensive is that physician? Is that recommended MRI
necessary?
Within limits, having options can be enormously liberating,
says Barry Schwartz, a psychology professor at Swarthmore College and author of the
2004 book The Paradox of Choice: Why More Is Less. "Having some control is more than
helpful. It’s essential to our well-being," he says. "And you can’t have some control
without some choice."
But, he cautions, "once you cross some kind of magical
line--and no one knows where that is--instead of liberating people, choice paralyzes
them. People become overwhelmed, confused."
Schwartz worries that employees will become indecisive,
postponing vital care and, in the end, running up larger health bills. Employers, he
says, should help employees by narrowing complex health choices as much as possible,
perhaps by presenting choices in pairs across a series of computer screens. "In
effect what you are doing is hiding most of the options from people," he says. "Then
people are more relaxed about decisions, more confident about them."
Human resource managers also can provide an emotional safety
net by offering health advocates, wellness programs and other specialized resources
when employees become ill, says Ron Fontanetta, a principal with the health and
welfare practice at Towers Perrin. That’s when employees are most receptive to
information anyway, he says.
"It’s important to create an environment of empathy with the
member," Fontanetta says. "When they are sick, they are scared."
Employers that don’t stay ahead of employee needs will soon
discover that "consumer-driven’’ can be an apt term. In 2002, the first year Aetna
offered a consumer-driven plan to its own employees, leaders didn’t provide a
financial modeling tool, says Robin Downey, Aetna’s head of product development.
Employees, she says admiringly, cobbled together their own computer spreadsheets to
better divine their own personal cost-benefit picture.
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