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.
Cost-shifting to consumers is decelerating, commented Morgan Stanley managing director Christine Arnold at a conference
last month sponsored by the Center for Studying Health System Change (HSC).
An estimated 8 million individuals are enrolled in CDHC plans that can link a high-deductible insurance policy to some kind
of savings account to cover out-of-pocket costs. But this total includes less than 3 million workers; most CDHC enrollment
growth involves individuals with few other choices.
This trend reflects reduced optimism among employers that the CDHC model will do much to reduce the number of Americans without
health coverage, says Robert Galvin, director of global healthcare at General Electric. He said at the National Medicaid
Congress in Washington in June that 30% of employers do not believe that the individual model will do more to cover uninsured
workers, and that only 19% of large employers consider CDHC the "way forward."
ERIC PLATFORM
One proposal for reviving the CDHC model comes from a coalition of more than 100 large employers that has developed a new
option for providing individual health and retirement benefits for workers. The program, developed by the ERISA Industry Committee
(ERIC), proposes that competing third-party independent benefit administrators provide these benefits to all individuals,
instead of each company offering different plans.
This approach would give employees access to a broad range of quality benefits programs that would be portable and available
with equal tax treatment to anyone. The plan would require Congressional changes in tax policy, as well as adoption of an
individual health insurance mandate.
Providing senior-level decision makers the comprehensive analysis, trends and strategies they need to innovate value in a rapidly changing healthcare landscape.
