Offering employees a variety of options
in a variety of different areas is crucial
to employee retention today. The more flexibility they have with time off,
retirement plans and other benefits, the
more likely they’ll be to stick around.
An increasingly popular health care
option is the consumer-engaged health
plan. The reason, according to Leon
Lamoreaux, vice president of business
development for Priority Health, is that it
gives employees options and encourages
them to be active, informed participants in
the health care they receive.
Smart Business spoke with Lamoreaux
about what defines consumer-engaged
health plans, how they’re administered and
what options they offer employees.
What is a consumer-engaged health plan?
A consumer-engaged health (CEH) plan
refers to a variety of products, programs
and services designed to promote consumer accountability and responsibility for
health care purchasing decisions. The ultimate goal is to eliminate waste throughout
the health care system and position the
member as an important participant in all
of the health care financing and treatment
decisions. Specifically, CEHs are thought
of as high-deductible plans coupled with a
health care reimbursement account.
There are three areas of engagement: the
mind, the body, and the money or financial
resources. The goal of engaging the mind is
to give members access to quality and cost
information, provide options and encourage them to be active, informed participants in the health care they receive. The
goal of engaging the body is to help members understand the correlation between
lifestyle choices and their overall quality of
life, and the cost associated with not
engaging in these healthy lifestyle choices.
The goal of engaging the financial
resources is to help members take part in
the save or spend decisions of their own
resources. There are many personal funding accounts in the classic definition of
CEHs: the Health Savings Account (HSA),
the Health Reimbursement Arrangement
(HRA) and the Flexible Spending Account
(FSA). The basic theory is that we spend our own money more wisely than we
spend someone else’s.
What are the advantages to a company offering a CEH plan rather than a standard health
plan? Are there any disadvantages?
Advocates for CEHs typically reference
the short-term and long-term savings usually associated with them as their greatest
advantage. When members become
exposed to the actual costs of health care,
and they have a vested interest in the financial outcome, there’s typically less health
care utilization than when they’re sheltered
from the true cost.
CEHs shouldn’t be entered into lightly or
simply to save money in the short run. It
takes a real commitment from the employer and from the member to be an active
treatment team member and active, price-conscious consumer. One of the often stated disadvantages of CEHs is the member’s
increased involvement. Members are
expected to become involved in researching the highest-quality, lowest-cost treatment options. It means they must investigate alternatives and perhaps even enter
into awkward discussions with their
provider about alternative treatment
options and steerage to generic drugs or particular participating providers.
The insurance industry is complex, and it
takes effort to become an informed health
care consumer. Tools are being improved
each year to give members access to quality and cost information. When these tools
are available and used properly, everyone
benefits from the experience. When they’re
not available or are misunderstood, it can
lead to a frustrating experience.
What are some different kinds of CEHs?
First-dollar coverage HMO plans — typically characterized as co-payment plans —
are at one end of the continuum. Even with
these, members can be engaged by aligning
co-pays so they mirror the expense as the
service level acuity increases. For instance,
if there’s a difference in co-pay amount
between the primary care provider and the
specialist, then consumer engagement is
occurring at a basic level. One of the primary ways of increasing engagement is to
use larger deductibles to involve the consumer in health care purchasing economics.
At the other end of the continuum is the
‘high-deductible health plan’ with an
accompanying personal funding account,
such as an HSA, HRA or FSA. As the member liability increases, the more the consumer becomes involved. Using
deductibles is one of the basic ways to
engage the consumer. It can be large or
small and still engage the consumer to
some degree. Recent generations of CEHs
provide payment or coverage differentials
based on the member meeting basic health
criteria, such as taking a health risk assessment, achieving a healthy body mass
index, not using tobacco products, maintaining normal blood pressure or participating in disease management programs.
CEHs are a great way for employers to
reduce the overall cost of their health care.
Call your agent or your health plan to find
out if these plans are right for you.
LEON LAMOREAUX is vice president of business development
for Priority Health. Reach him at leon.lamoreaux@priority
health.com.