Whether a comprehensive overhaul of the U.S. health care system is in the cards or not, employers are continuing to take steps to "bend the cost curve down" by prompting employees to take more responsibility for their health and providing them with incentives to seek cost-conscious quality care.
"We all know that the status quo won't do," Jeffrey D. Alter, CEO of the Northeast region at insurer UnitedHealthcare, said during his keynote presentation at the 2010 Employer Health & Human Capital Congress, held Feb. 3, 2010, near Washington, D.C.
"Health care consumerism is a revolution that is under way," he stated. "As we move into consumerism and ask people to take more responsibility for their health care, it's important that we do a better job of building a support structure, and that requires innovation. We have to think differently. The way our benefits are provided has to change, and it has to start by giving our employees better information so that they can make better decisions, so they can live healthier lives."
Understanding Cost Drivers
UnitedHealthcare's research suggests that nearly 50 percent of the cost of health care can be managed more effectively. "Costs today are being driven up by excess medical inflation and excess utilization. Excess medical utilization is basically our enrolled members—and your employees—using their health benefit incorrectly, making poor decisions, along with poor execution by” physicians and hospitals, Alter said. “There is a propensity to consume more than is necessary, particularly because most of our employees feel that someone else is paying for it. The days of $20 co-pays have to be eliminated."
Personalized Data, Incentives and Education
"With the wide range of access that we've given most of our employees today, they have the chance to make poor decisions very often," Alter said.
"We can save employers money, and save our employees money, while providing better health care," he continued. "It starts by supplying information that's timely, personalized and actionable. We are not very good right now at personalizing the information that can help consumers make better decisions. That information is nonexistent, sketchy or comes too late to help."
A good starting point is offering personalized biometrics that include body mass index, sugar levels, triglycerides (fat) levels, blood pressure and cholesterol, and incorporating this data within a health-promoting action plan, with the support and incentives necessary to motivate employees to stay the course. "Reach out to employees and engage them in the way they want to be engaged, whether it's telephonically, by e-mail or through mailed reminders," Alter recommended.
Moreover, "Experience shows that without financial incentives, the emotional connection to a health-promotion program isn't there. The need to adhere to the program may be understood intellectually, but engagement isn't there," he observed.
Along with personalized data and a health improvement program with appropriate incentives, education is needed for consumers to make responsible decisions. But there's a hurdle to overcome: "Health education tends to be viewed as boring until you get sick, and then it's scary," Alter said. He urged that online tools directed at encouraging healthier lifestyles (and better decision-making) be entertaining and interactive, and he pointed to UnitedHealthcare's consumer education web site, http://healthcarelane.com, as one example.
Rating Providers
Alter also urged greater efforts to provide consumers with transparent quality ratings of providers. "Push for transparency and value," he advised. "Quality has got to be defined and demanded."
Employers should negotiate with their vendors to provide this information, Alter suggested. For example, "Which physicians are practicing in accordance with their stated guidelines for care? Determine that and give them a star. Are they practicing efficiently and saving money by avoiding unnecessary utilization? If so, give them a second star. If everyone then used these two-star providers, we'd save 20 percent in our health care system. If consumers managed their chronic care conditions to the optimal level, we'd save another 10 percent to 15 percent. And if employers moved their employees to a consumer-directed health plan that provides them with 'skin in the game,' we'd see another 10 percent savings."
"You can see the road map," Alter concluded.
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Insurers Measuring Doctors Against Quality Metrics
UnitedHealthcare, the nation's largest health insurer based on revenues, has started sending doctors individualized reports assessing their treatment of breast, lung and colorectal cancer patients. The company hopes that drawing doctors' attention to how their treatments might vary from medical protocol will reduce unnecessary care that doesn't improve health and raises health care costs. UnitedHealthcare has been collecting clinical information directly from oncologists. It then compared the choices that a doctor made for a particular patient's treatment with claims data and guidelines developed by the National Comprehensive Cancer Network, a consortium of 21 leading treatment centers.
WellPoint Inc., the country's largest insurer by number of members, has a pay-for-performance program in primary care that rewards physicians based on technology adoption and generic-drug use.
The American Society of Clinical Oncology, a professional organization, has been running its own quality-assessment program, in which doctors' performances are measured against national guidelines. The group is seeking to enlist the help of insurers to expand the number of participating physicians. One company that has signed on is Blue Cross Blue Shield of Michigan, which pays doctors to help defray the administrative costs of submitting their clinical data to the program a few times a year.
(From "Insurers Play Judge on Cancer Care," Wall Street Journal, Feb. 9, 2010) |
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Cost Savings with Consumer-Driven Health Care:
In a separate keynote presentation at the 2010 Employer Health & Human Capital Congress, David Randall, executive director of the Consumer-Driven Health Care Institute in Washington, D.C, took note of a 2009 survey by health insurer Aetna showing that:
• Full replacement consumer-directed health care (CDH) plans —offering health savings account (HSA) or health reimbursement arrangement (HRA) plans as the sole option—saved U.S. employers $21 million per 10,000 enrolled members over five years.
• Employers that offered CDH plans as an option along with traditional health plans saved $7 million per 10,000 enrolled members over five years.
• Employers that offered CDH plans as an option but who engaged employees for adoption using strategies identified as best-in-class saved $23 million per 10,000 members over five years. (These strategies include a focused and continuing employee education campaign offering wellness programs and incentives for healthy behavior, providing 100 percent coverage for preventive care, and carefully constructing a plan with the right mix of member responsibility.)
Similarly, a 2009 study by insurer CIGNA also found sustained savings from CDH plans. CIGNA found that in the first year, normalized medical trend for CIGNA CDH plans was -3.3 percent vs. +10.6 percent for traditional plans—almost a 14 percent difference. The analysis compared individuals in different types of CIGNA plans with the same employer. The study also showed the lower medical trend for CDH plans continued in subsequent years, and that CDH enrollment covers the spectrum of healthy to chronically ill. (For more on this research, see Cigna Choice Fund Experience Study.)
More Employers Providing CDH Plans
Randall pointed to joint research by AON Consulting and the International Society of Certified Employee Benefit Specialists (ISCEBS) in 2009 indicating that 83 percent of U.S. employers offered HSA or HRA plans to their employees. Although only 17 percent offered a full replacement CDH program, that number is expected to increase significantly in 2010. (For more on the AON/ISCEBS study, see the SHRM Online article, Most U.S. Employers with Consumer-Driven Plans Prefer HSAs.)
The AON/ISCEBS study comes in on the high end. By way of comparison, the 14th Annual National Business Group on Health/Watson Wyatt (NBGH/WW) Survey of 489 Fortune 1000 companies, conducted in January 2009 and released two months later, found that 51 percent had CDH plans as a choice or as the only offering, up 9 percentage points from the previous year. The NBGH/WW survey suggests that nearly 60 percent of employers will offer a CDH plan in 2010. (See the HR Magazine article, Consumer-Directed Health Plans: By the Numbers.) |
Stephen Miller is an online editor/manager for SHRM.
Related Articles—SHRM
Double-Digit Health Care Cost Increases Expected to Continue, SHRM Online Benefits Discipline, February 2010
Most U.S. Employers with Consumer-Driven Plans Prefer HSAs, SHRM Online Benefits Discipline, November 2009
Rebalancing Health Costs, HR Magazine, September 2009
Consumer-Directed Health Plans: By the Numbers, HR Magazine, June 2009
Health Care 'Transparency': Advances Noted; Work Remains, SHRM Online Benefits Discipline, October 2007
Related Article—External
Cigna Choice Fund Experience Study, Cigna, December 2009
Quick Link:
SHRM Online Benefits Discipline
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SHRM 2010 Annual Conference Session:
"Proven Strategies for Tackling Health Care Costs." Presenter: Jane Cooper, Monday, June 28, 10:45-Noon. Click to view Conference Agenda. |