Overwhelmed by Choices

    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.