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.

‘The key challenge [for consumer-directed health care’ is that individuals, and especially cancer patients, will require more detail than physicians are used to giving, or may have time to give.’

HealthyQuest stresses weight loss for those who are overweight; regular exercise and fitness; education on risk factors; proactive steps to stop smoking; proper eating habits through vending machine controls and nutritional audits; and an interest in self-care in addition to appropriate medical care.

One thing we learned was to be bold, Mr. Williams said. You can’t be timid. You’ve also got to be patient. We have an entire generation of consumers who believe their health is someone else’s business. You actually have to sell health to employees.

He also said the company had to work hard to convince employees that their privacy would be protected, and that their health status would not be used against them. The message, he said, was: This is about improving your health, not terminating your employment.

Mr. Williams willingly stated that the first year was not a great year. But, he said, when you get the concept across, then you have people who run with it.

In doing an online health risk assessment of employees participating in HealthyQuest, the company found, Mr. Williams said, that 61.7% of employees are overweight or obese; 31.7% eat one or fewer servings or fruits or vegetables a day; 66% exercise aerobically less than three days a week; 21% have high glucose levels; and 43% reported having a serious problem with stress, among other data.

Financial Incentives

To change this picture, the company started providing financial incentives to participate in HealthyQuest. The company also distributed health education pamphlets. The one on cancer describes screening tests for breast, cervical, colorectal, and prostate cancers, lists risk factors, and describes six lifestyle steps employees can take to reduce their risks of cancer.

Quest Diagnostics found that once the notion of consumer-directed health care programs had taken hold, employees responded with enthusiasm. More than 65% of enrollees in such plans are women, 51% are single, and the average age is 44.

It’s definitely not a one-year thing…it’s not a flash in the pan, Mr. Williams said. Enrollment success breeds success. When employees are interested in taking a more active role in their health; they are definitely capable of directing their care.

Challenge to Provide Details

But, he noted, they need much more specific information and education. So far, the company’s efforts have paid off with thousands of employee pounds shed and thousands of dollars saved in employee health care premium costs for 2006, he said.

For health-care providers, Dr. Wright said the key challenge is that individuals, and especially cancer patients, will require more detail than physicians are used to giving, or may have time to give.

Study: Some Patients Lukewarm about Consumer-Directed Care

About 50% of patients still want their physicians to make the final treatment decision, according to a study funded by the Agency for Healthcare Research and Quality.

The study of 2,765 patients, led by Wendy Levinson, MD, of the Department of Medicine of St. Michael’s Hospital of the University of Toronto, was published in the Journal of General Internal Medicine (2005;20:531-535).

Although a total of 96% of respondents wanted to be offered choices and asked their opinions, 52% said they preferred to leave the final decisions on medical care to their physicians, and 44% preferred to rely on physicians for medical knowledge as opposed to doing research to find information on their own.

Women were more likely than men to prefer a consumer-directed, active role in clinical decision-making. Blacks and Hispanics were more likely to prefer that physicians make the decisions. Age was also a factor-preferences for active decision-making increased with age up to 45, but then declined.

©2006 The Triological Society