CDHP Chosen to Save Money and Raise Health-Consciousness

April 18, 2005 ( - Ninety-six percent of employers who choose to offer consumer-driven health plans (CDHP) to employees do so at least in part in order to encourage more cost-effective health care consumption.

This is one of the findings of the Segal 2004 Survey of CDHPs, which looks at trends in health care for employers and employees. On top of this reason, 93% of respondents claim that they choose such programs to raise employees’ health-consciousness. Ninety-six percent also cite the need to reduce health costs.

The survey found that of those who offered CDHPs for at least two years (56%), 81% had them as only an option, with 48% provide incentives to use such programs. The most common set-up was a high-deductible health plan combined with a health reimbursement account, which was the offering of 89% of respondents.

Success and Failure

Although employee support for such programs is not overwhelming, only 25% report that their employees are still resisting such programs, and 62% say that their employees are now “on board.” Enrollment rate is not growing however, with 75% reporting that no significant growth in CDHP enrollment has been seen in the past year.

Despite a somewhat lackluster enthusiasm for such programs, employers are reporting a decrease in prescription drug costs or claims (cited by 65% of those polled), and a corresponding increase in generic substitution for name brand drugs (also 65%).

Rating CDHP success doesn’t show an overwhelming enthusiasm from employers, either. While 62% say that such programs have been successful, only 11% said that they are fully successful. According to the survey, success stems from commitment from senior management (83%), communication about costs (83%), and choosing the right vendor (78%).

Communication and Behavior

The survey also found that there was a strong correlation between the amount of information available to employees and the changes in their behavior to reduce health costs.

A majority of employers (63%) say they have invested more in CDHP communications than in other benefits, but employers as a whole do not think that employees are well-enough informed on doctor and hospital costs, as well as performance or quality of care.

Despite the overall lack of knowledge, employers are reporting that those who do have information make better decisions. According to the report, between 25% and 64% of employers report an increase in participant wellness, lifestyle and use of costs and quality intervention and overall employee satisfaction.

The Segal survey results are available here .