When shopping with someone else’s
checkbook or the company credit
card, one is less likely to count pennies. However, when it is coming directly out
of pocket, a little more time is generally
invested beforehand to ensure the quality
and viability of the purchase. Consumers do
this regardless of income level. Some do it
because it is a way to continue to build
wealth, and others do it because it is essential
to spend only what is absolutely necessary.
Ironically, for many years, the health care
system has been set up to separate consumers from the purchasing decision and to
systematically require that they pay out of
someone else’s checkbook. And the health
care system has progressively paid the price,
figuratively and literally.
In a recent Wall Street Journal article,
experts debated the issue of the rising cost of
health care and how consumer-driven health
care (CDHC) might address the problems
this setup has created. According to the article, most people have health insurance that
pays for nearly all health services, including
routine and affordable care. This creates a
‘moral hazard,’ where consumers purchase
more health services than they would have if
they were fully aware of the true cost. The
article also states that health care providers
have little incentive to limit the use of services that may make only a marginal improvement in a patient’s condition, knowing that a
third party is paying the bill.
“Still, the horizon is not as bleak as the past
might lead the public to believe,” says Rachel
Sapoznik, president and CEO of Sapoznik
Insurance. “As the article states, CDHC could
break this health inflationary spiral by making consumers more aware of costs. If people
are spending their own money, they’ll be
invested in how that money is spent.”
Smart Business spoke to Sapoznik about
CDHC and how it could help fix health care
in America.
What exactly is CDHC?
CDHC isn’t about shifting costs to employees. It is about shifting money from employers to employees. That way, employees can
manage their own health care, on their own
terms. Shifting the money and the power of
choice to the patient is a powerful change.
Critics of standard health care plans feel
that something has got to give within the
corporate community. The system of decision-making in health care has driven costs
up so high that companies are increasingly
choosing to restrict benefits or, even worse,
to stop offering them altogether. For most
companies, it isn’t that they aren’t willing to
invest in health insurance; the problem is
that the amount they are willing to invest
doesn’t get much value for the employee
under the old model.
Under the new model, patients have both
the funds and a vested interest in becoming
better informed about medical services
and choices prior to making the investment of those funds. Ultimately, these
patients will choose medical services that
are both health- and budget-conscious, and
the system as a whole can begin to operate
within a healthier, competitive pricing
structure.
When patients are paying more attention
to the cost of health care and demanding
value for their dollars, total health care
spending will decline. And, when spending
declines, health insurance will be much
more affordable, which will reduce the
number of uninsured. It’s all about making
the choices that are right for the individual.
How can you get your employees on board
with CDHC?
Employers like CDHC because it informs
employees of the true expense tied to the
medical services they use, while effectively
controlling health care costs. Employees like
CDHC because of the investment possibilities and/or the tax benefits.
Still, no employer can assume there will be
complete employee buy-in for CDHC. CDHC
cannot be successfully implemented unless
the consumer is actively involved. So, if your
employees are reluctant or hesitant, you
must give them a clear understanding of
what’s being offered and how it works. One
of the most important parts of a CDHC plan
is the communication program you use to
educate your employees. And when explaining CDHC with your employees, repeat your
message over and over again, in as many different forms as possible. The more employees read or hear about the concept, the more
they’ll understand and accept it.
How should a company get started with
CDHC?
When rolling out a CDHC program, you
must first have organizational support. Start
with senior leadership and HR, explaining
why you’re making the benefit change and to
clearly demonstrate how the program will
work. Once the higher-ups are fully educated,
announce the change to employees, demonstrating the program’s importance and its
value proposition. From there, you’ll be able
to start building employee buy-in. Again, get
your message to employees repeatedly,
through in-office and home messaging tactics, easy-to-understand examples and face-to-face meetings.
The next step is to provide enrollment
support via phone and Web-based tools.
Your employees must have easy access to
their accounts. Finally, stay on top of the
plan and how your employees are adapting
to it. Provide constant education and frequent updates throughout the year. With
health care constantly changing and evolving, it is vital to keep your employees up to
date.
RACHEL SAPOZNIK is the president and CEO of Sapoznik Insurance. Reach her at [email protected].
