Total Benefits:Pocket Change
Illustration By Christian
Northeast
A gloomy economic forecast could prove to be a sunny
future for the health-care consumerism trend as more
employers seek lower-cost solutions.
A gloomy economic forecast could prove to be a sunny
future for the health-care consumerism trend as more
employers seek lower-cost solutions.
Regina Herzlinger, a Harvard Business School Professor
and author of Consumer-Driven Health Care: Implications for
Providers, Payers and Policymakers, predicts that
consumer-driven health plans (CDHPs) and high-deductible
health plans (HDHPs) will grow substantially in number
because of the recession and rising uninsured population,
which, in turn, will lower rate increases as the market
becomes more competitive.
When people are forced to pay for medical services out
of pocket and become more motivated to seek the best
possible value, she says, providers may respond with a
lower price point—citing as an example of this phenomenon
the cost of Lasik eye surgery having fallen by almost
40%.
Recent research appears to support her thinking. CIGNA
Choice Fund account-based CDHPs reduced medical cost trends
by 13% relative to HMO and PPO plans, according to a recent
multi-year study that compares the health-care claims
experience of nearly 440,000 covered lives. The principal
conclusion was that CDHP enrollees were more apt to use
more preventive services and comply with their medical
treatments.
Nearly 10 million employees enrolled in CDHPs and HDHPs
last year, noted the Washington-based Employee Benefit
Research Institute's (EBRI) 2008 Consumer Engagement in
Health Care Survey. EBRI pegged CDHP participation at just
3% of the total population compared with 2% in 2007 and 11%
for HDHPs—adding that, among the 13.4 million consumers
with an HDHP, 42% did not have a health savings
account.
Other sources show even greater market traction. For
example, the Centers for Disease Control and
Prevention's annual National Health Interview Survey
found that 20% of the under-55 popuÂlation now has HDHPs.
Greg Scandlen, a Senior Fellow and Director of Consumers
for Health Care Choices at the Heartland Institute in
Hagerstown, Maryland, calls it an "amazing feat in
just six years' time."
A key takeaway from the economic crisis for the
health-care consumerism movement is that "institutions
are not to be trusted, and all of a sudden self-Âreliance
has really hit home," he observes.