More Employers Switching to ‘Consumer-Directed Health Care’ as Way to Control Costs

WASHINGTON, DC-Plagued by annual increases in health-care premiums for their employees that regularly reach double digits, some US companies are exploring the role of consumer-directed health care with the goal of fostering healthier workers who are more accountable for their own health, thereby reducing the costs of company-provided health insurance.

Specifically, consumer-directed health plans make use of health savings accounts (HSAs) or health reimbursement arrangements (HRAs) for employees, which give employees more responsibility in how they spend their health dollars. But not all patients are enthusiastic about the idea (see box, below).

Consumer-directed health care was showcased at a conference here several months ago, held in conjunction with a meeting called the Emerging Technologies and Healthcare Innovations Congress.

According to statistics from the National Association of Manufacturers, although less than 1% of employees incur medical costs over $50,000, in the aggregate these costs represent more than 20% of the average employer’s overall health care costs. Thus employers are looking for any strategy that can reduce claims for catastrophic illnesses and preventable chronic conditions.

Health Reminders

Health message reminders sent directly to members of health plans are an important tool of consumer-driven health care, said Alan Wright, MD, Vice President for Product Strategy & Business Development for Resolution Health, Inc., a company based in San Jose, Calif., that helps health plans adopt and use consumer-driven health tools. The health messages are grounded in guidelines from accepted medical groups such as the American Cancer Society and are based on a company’s claims and outcome data.

You have to be right when you’re messaging to patients, he said. It really ups the ante a lot; specificity is very important. A typical message, which is usually written on a sixth grade level, might remind a health plan member that she has not had a mammogram in the last three years, or that she needs a Pap smear.

The absence of Pap smears and mammograms can show up in claims data, Dr. Wright noted.

With the federal government moving toward pay-for-performance initiatives that reward excellence in medical care and with the Medicare Part D drug reimbursement, consumer-directed health care is likely to become an ever more important player in the health arena in 2006, Dr. Wright predicted.

Pay-for-performance is looming out there; people are going to be dissecting out why one doctor is better than another. Pay-for-performance converges with consumer-directed health care.

And, he noted, consumer-directed medication therapy management under Medicare Part D is going to be crucial, especially for older patients taking multiple medications.

Case History with Quest Diagnostics

At the conference, Fred R. Williams, Director of Benefits & Strategic Alliances for Quest Diagnostics, presented a case history showing how his company adopted a consumer-directed health-care program for its employees in 2002, and launched a wellness initiative, HealthyQuest, in May 2005.