Posts Tagged ‘benefit plan’

Consumers Must be Consumers

I recently talked with Kelly Kennedy for a USA Today story about health insurance options and saving money… and made the point that when it comes to healthcare today, consumers need to behave like consumers.

Fortunately, I seemed to get my points across…  that with rising healthcare costs today, patients need to shop… and high deductible health plans do an admirable job of spurring that behavior.

In days past, most people didn’t ask how much a service cost because the bill went straight to the insurance company and the consumer never really felt the pain. (After all, healthcare costs $20, doesn’t it?)  Now, with almost 61 percent of employers planning to implement consumer driven health plans this year as a hedge against the ever-rising cost of care, that’s changing. Consumers may have a little more impetus to care about what things cost.

And where previously they might have been shopping blind, with no price tags to guide them on what things actually cost, now with cost transparency tools at their virtual fingertips (like change:healthcare’s Cost Transparency Solution), they’ll know pretty darn close what a service or product or care will cost BEFORE they buy it, and can make far more informed purchase decisions.

There are lots of savings to be had, too.

A recent assessment of our own nationwide database confirmed that without changing a thing about how healthcare is delivered, employees can save, on average, $350 each per year in their healthcare purchases.   Multiply that times the number of self-insured employees nationwide and you’re talking billions in savings.  Yeah, billions, with a “b.”

From where I sit, enabling consumers to become better purchasers — and then giving them the informational tools that aid their shopping — can be a great first step in dramatically decreasing the cost of healthcare in this country.

All we need to do is get consumers to simply be consumers.

Women are the Drivers in Healthcare Shopping

For some time now, a chief complaint among employers has been, “How do we get employees to care about their healthcare benefits and the associated costs?”  For anyone who’s read this blog, you know that I’m a bit obsessed with that mission as well.

Last week I read two new research reports that allude to an increasing consumer involvement in healthcare.  Many of the statistics reveal that companies have a real opportunity to be heroes to their employees where cost transparency is concerned. Music to my ears.

  • In the February issue of EBRI Notes, the Employee Benefit Research Institute (EBRI) reported on its 2010 Health Confidence Survey, concluding that “women, younger individuals and those with more education were more likely than others to seek information on cost, quality and access. It also found that individuals who experienced an increase in either premiums or cost sharing were more likely than those who did not experience such an increase to seek (healthcare) information.” And a quarter of the population looked for costs of different treatments, doctors and hospitals.
  • In another study focused on how employees make healthcare decisions, the National Business Group on Health stated that 75 percent of workers use their employer as a resource for medical and health information. Additionally, 69 percent rate their employers as completely, very or moderately trustworthy sources of health information.

In my judgment, the upshot of both of these studies is that as more consumers (read: employees) are paying a greater share of the cost of healthcare, they’re beginning to seek more information about the quality and cost of care.  We’re seeing this trend reinforced in the use of our Cost Transparency Solution. Data development from the change:healthcare informatics team shows that even in an employee population that is only 37 percent female, more than 50 percent of the employee engagement with the change:healthcare Cost Transparency Solution is through women.

We know that women are responsible for more than 80 percent of healthcare purchase decisions. It’s great to see that play out within our own client base. American’s know how to shop – American women are experts. The healthcare system should cater to women, and shopping.

Saving Your People and Your Business

I just read a new book from cover to cover in one sitting. The book, written by Wendy Lynch, PhD and Hank Gardner, MD is titled, Who Survives? How Benefit Costs Are Killing Your Company.”

However, I believe the subtitle of the book, “Saving Your People And Your Business,” better summarizes why business owners, HR managers, senior executives and, maybe most importantly, government legislators – ESPECIALLY those who are actively pontificating about healthcare and healthcare benefits – ought to take an hour and read this book.

Folks, this book is worth the read for the clear-headed narrative around benefits alignment and the discussion of the aptly used reference of OPM (Other People’s Money). Wendy and Hank have a real gift for taking on an often divisive discussion topic that I’ve heard debated and passionately defended everywhere from in boardrooms to breakrooms – the U.S. healthcare system.

Three years ago, I was faced with an elemental question by my dying mother related to her healthcare and the ensuing/mounting bills: “Honey, just tell me who I owe, what I owe and if it is fair.”  That ridiculously obvious and reasonable question was incredibly difficult to answer because of the perverse mis-alignment of the current system’s lack of transparency to the patient and caregiver around cost and value.

Yet it was/is not misaligned out of spite nor malice, but because the people paying the majority of the bills were not the patient but rather the insurance company and the government (Medicare in my Mom’s circumstance). Ironically, the people that were paying the bills could have answered Mom’s questions, but over the decades, they continued to lose touch with a patient’s need and inherent desire to get the best value for any given service. It is also true that patients have lost touch with caring about value, as every medical expense seemed like any and every service was simply a $20 co-pay regardless of intensity (unless you were uninsured, which then meant you were simply screwed and at the mercy of the system).

One of my favorite quotes from the beginning of the book helps to summarize why it’s worth reading:

“I was ready for a new explanation, but old beliefs die hard. Several months into our collaboration, Hank and I had a conversation about patterns of costs in a company facing significant challenges. He asked what I thought about their insurance plan and absence policies. Because my answer showed I was less interested in policies and more interested in employee health, he issued me a direct challenge: make the effort to understand the over-arching influence of economic incentives or it will be difficult for you to help employers.”

Times have changed for healthcare. The idea that patients have the right to spend OPM is fading away. Patients are now spending more and more of their own money. Not only that, but they are asking the same question that my mother asked, “It’s my money now. Was it a good value for the money spent?”  To me, that cataclysmic shift from OPM to MMN (My Money Now) follows the core premise that economists have long understood (and Wendy and Hank eloquently and concisely convey in their book) – that we have a right and responsibility to take care of our healthcare expenditures.

I don’t mean to sound arrogant (passionate maybe) but every CEO and legislator should read this book because without grasping its insight, without embracing its core precepts, healthcare costs will continue to spiral out of control. And those left with the massively accruing bills will never be given the information they need to determine the value for the services they access. Without alignment of incentives, U.S. healthcare will remain a $20 all-you-can-eat buffet. Sadly, if the buffet continues, there won’t be anything to bring out of the kitchen to restock because we’ll run out of resources and money to serve the hungry customers who continue to pile in the door and return to the line again and again.