Washington, D.C.—Despite earlier promises that consumer-directed healthcare (CDHC) programs would reduce healthcare spending by encouraging more efficient purchase of health services, consumer confusion and higher out-of-pocket costs seem to be slowing enthusiasm for these plans.

Price is paramount to survival in the current healthcare market. With skyrocketing premiums, moving toward an affordable level for both the employer and the employee/member is essential, experts agree.

The rise in popularity of consumer-driven healthcare (CDHC) will challenge HMOs to be at the top of their game, say industry watchers.

Conventional wisdom says that to introduce real change, you need to bring in someone from outside. Jack LeFort, CEO and founder of Connextions Health, a company in the emerging field of consumer-directed healthcare (CDHC), has brought a similar paradigm shift to healthcare from the outside.

All health plans and providers that do business with Medicare, Medicaid and other federally sponsored health programs soon will have to adopt information technology standards and quality-measurement tools. The Medicare Modernization Act of 2003 (MMA) requires the Department of Health and Human Services (HHS) to establish standards for electronic prescription drug prescribing by 2008, and this policy is driving broader efforts to build health IT systems.

As the nation faces a healthcare "affordability" crisis, market forces are driving changes such as consumer-directed healthcare, which is fueling the next revolution in healthcare: real-time transactions. At the center of this momentous change sits the health plan and its enterprise systems.

The issues have been framed brilliantly, debated enthusiastically and examined closely. While it might not resemble the California Gold Rush, employers that implement wellness programs can still find significant rewards.

Supporters of consumer-directed healthcare options want Congress to increase tax breaks and coverage limits to broaden the appeal of health savings accounts (HSAs) linked to high-deductible health plans. Health insurers and employers back legislation that would expand tax credits and higher HSA contribution limits plus increase flexibility in the use of HSA funds.

Pay for performance (P4P) is touted as the magic bullet du jour for our healthcare cost concerns. In mid-2005, CMS released its "Quality Roadmap" aimed at delivering "the right care for every person every time." Consistent with this initiative, CMS has published quality measurements and information directed toward the beneficiary, the provider and, ultimately, the purchaser audiences.