As healthcare costs continue to spiral, the search for solutions is reaching a frantic pace. My experiences over the years
have led me to believe that while Consumer- Directed Healthcare (CDHC) has entered the mainstream lexicon, it is far from
understood.
The purpose of this and future columns, which will appear in MANAGED HEALTHCARE EXECUTIVE, is to bring healthcare executives
up to speed on what CDHC is and isn't, what it can and can't achieve, and why you need to know more about it.
Some facts about the growth of CDHC:
- Studies have shown that approximately 50% of U.S. employers are actively researching and considering a CDHC option.
- Forrester Research Inc. predicts that the number of health savings accounts (HSAs) will grow to more than 6.3 million by 2008.
- On May 4, America's Health Insurance Plans (AHIP) conducted a survey of 99 AHIP member companies and found that more than
1 million people have enrolled in an HSA-qualified, high-deductible plan in just 14 months: 556,000 in the individual market,
147,000 in the small-group market, 162,000 in the large-group market.
- Even more importantly, the AHIP survey revealed that 37% of those in the individual market, as well as 27% of those in the
small-group market, were previously uninsured.
A NEW WAY OF THINKING The first thing healthcare executives need to do when they research CDHC options is to think of it as a completely new business
model that focuses on the consumer. Thinking of HSAs, health reimbursement accounts (HRAs), flexible spending accounts (FSAs)
and other high-deductible health plans in the same terms as HMOs and PPOs will only lead to frustration and, ultimately, failure.
Consumer-driven health requires business transformation, shifting the focus to respond to and serve a member's needs as a
consumer.
Further, while healthcare costs are a primary driver for the push to CDHC, money is not the answer. No financial incentive,
attractive as it might be, will effectively teach people how to use their healthcare spending accounts. Only patience and
education can accomplish that, which means easier-to-understand tools will need to be developed and made widely available.
The connection with the member starts before the point of sale. Health plans will need tools for enrollment that help the
members understand the decisions they are making. Cost calculators and tools that explain the various cash accounts will be
critical factors for success.
Things to consider:
- How will you train and incent your broker community to offer these plan designs?
- Who will train the customer on how to use these plan designs to their fullest potential?
- How do you make it easy for all parties to understand their options?
- What happens after enrollment?
- Who is responsible for customer service when multiple parties are involved?
New, member-centric, Web-based technologies will be key to success. Consumers are not incompetent, just inexperienced. Once
they understand their role, members will:
- be motivated to be better, more selective consumers of healthcare resources;
- be more likely to utilize preventive and wellness services to hold down their long-term healthcare expenditures; and
- learn to be discriminating buyers by demanding information on cost and quality.
Achieving any one of the above would constitute a significant improvement in the healthcare system; taken as a whole, they
amount to an industry transformation.
In future installments, I'll outline key success factors and what steps health plans can take today to be prepared for the
future of CDHC.
Kathy McAleer, a veteran in the rapidly growing field of Consumer-Directed Healthcare, is vice president of operations for
QCSI's MyHealthBank product line.
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