HR Newsletter
February 2007
Making the Most of Consumer-Directed Health Plans
Since their inception about five years ago, consumer-directed health plans (CDHPs) have been carefully watched by the insurance industry, the medical community and public policy experts. Their question: will CDHPs help stem ever-rising health care costs, without reducing quality of care? While the plans are still somewhat new, and information on their use is limited, many are now finding early indicators of CDHPs’ success. And, if the primary objective of CDHPs is to reduce costs while maintaining high levels of care, several factors stand out as keys to boosting the effectiveness of these plans in reaching that goal.
Early research and anecdotal evidence suggests that CDHPs can help employers and employees save money on health care costs. The key is to make sure that employees are getting the health care they need now, not putting off important care in an effort to save money (a practice that could cost more down the road). How do you encourage employees to get the care they need, without wasting valuable health care dollars? Here are a few tips.
Encourage positive behavior with financial incentives. Many consumer-directed plans include financial incentives to encourage participation in programs such as health risk appraisals, disease management programs to develop self-management skills for chronic diseases, and wellness initiatives.1 Offering a one-time cash bonus or credit toward medical premiums, or providing a deposit in a Health Savings Account, can encourage many employees to take advantage of these programs. And the amount doesn’t need to be huge - $50 to $75 will may persuade many employees.
Support employee consumerism with decision-making tools. CDHPs require participants to become much more involved in their health care choices: suddenly, your employees must consider cost as well as quality of care. Because it can be difficult to compare costs of care (even calling providers directly won’t always result in an accurate price), be sure to visit your carrier’s web site to find out what comparison features your plan offers.
While experts do not know what long-term pressure consumer-directed health care will place on medical costs, many agree that for now, CDHPs are helping individuals and their employers save valuable health care dollars – when used appropriately.
1Consumer-Directed Health Care: Early Evidence About Effects On Cost And Quality. Health Affairs 25. October 2006.
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