The Problem
Health care costs are soaring. After many failed attempts to control these costs, it's time to rethink the word "health care" by putting more emphasis on health and less on care. A paradigm shift is needed, and this starts by seeing ourselves as consumers of health care who are in control of what our dollars purchase, and not as patients who passively accept what's offered by physicians or an employer's health plan.
The Cause
Consumers have a big role in getting health care spending under control, but most health care users don't understand how their choices have contributed to the current challenge. They don't understand the true costs of their lifestyle choices and the impact those choices have on the cost of health care
Did you know that from 1998 to 2004, the average cost of an abdominoplasty (tummy tuck) rose by 19%, only slightly faster than the rate of inflation? By comparison, per capita health care spending increased by 49% over that same period. A tummy tuck is an elective surgery not covered by insurance; those who decide they want or need the procedure pay for it out of their own pockets. Because it's their money they're spending, they're unlikely to make frivolous decisions-they won't, on a whim, run to a plastic surgeon to undergo a costly and invasive procedure without first doing their homework. Medical procedures paid for with consumers' hard-earned money are carefully researched, considered, and weighed against other options. It's what an informed health care consumer does.
In contrast, most consumers are unaware of the actual costs of the health care services covered by their insurance plans. When billing and payment are arranged between doctors and insurance companies, consumers don't think twice about going to the doctor or getting a prescription filled. For most consumers, it's just a co-pay.
Simply put, when there isn't a "real cost" associated with medical care, consumers won't take the time to consider the cost or whether they really need the service they're seeking - this kind of behavior leads to unnecessary use of health care and drives up cost.
The Current Solution
The difference between using traditional managed-care techniques to reduce costs and helping consumers monitor their own behaviors and health care spending is driven by one major factor: motive. Consumers are focused on saving money, especially when it's their own. Their focus on money is tempered by attention to their health. By becoming better informed about the care they receive and the lifestyle choices they make every day, consumers not only avoid using the system unnecessarily but also guarantee their health is the #1 priority for them and their families. That mindset benefits their employers and the insurance companies underwriting their risk.
A New Approach
Consumer-driven health plans (CDHP) are health insurance plans that combine a lower premium, high deductible health plan (HDHP) with a health care account. The tax-preferred money contributed to a health care account, combined with some out-of-pocket expenses, covers health care spending up to the amount of the annual deductible. This health insurance solution is highly effective because of its philosophy, which is governed by three principles: transparency, responsibility, and opportunity.
Principle One: Transparency
In a traditional health insurance plan, a consumer goes to a health services provider without considering the visit's cost. In most cases, all the consumer pays toward the cost of the service is his or her co-pay. The inherent design of this health insurance product hides the rest of the cost from the consumer. Without knowing the true costs, consumers have no incentive to consider their options and choose the most appropriate, cost-effective treatment.
Principle Two: Responsibility
With knowledge comes responsibility. Consumers have a responsibility to live a healthy lifestyle and mitigate health risk issues (i.e., diet, exercise, sleep and stress). They also have a responsibility to understand the value of the health services they receive - it's up to them to make informed decisions about how they use them and carefully consider their options in a non-emergency situation. A responsible decision about using health services could be as simple as speaking to a nurse or taking a day off work to rest instead of making a trip to the doctor. In most cases, consumers can access the health insurance company's nurse help lines for medical advice instead of going to the emergency room for non-emergencies. The help lines are staffed by registered nurses specifically trained to answer symptom-based questions and provide guidance.
Principle Three: Opportunity
The CDHP and Wellness solution comes with opportunities for the consumer to benefit physically and financially. Beyond improving the consumer's health and general well-being, participating in a CDHP and Wellness plan offers significant financial advantages to the consumer in the form of unused dollars, which can be carried forward for future health care expenses.
Mark S. Gaunya and Jennifer A. Borislow are authors of "Bend the Health Care Trend," who have over 20 years of experience and leadership in the benefits industry. Mark is a pioneer in the consumer-driven health and wellness plan space and passionate about its ability to revolutionize the healthcare industry. Jennifer is passionate and committed to engaging consumers in taking charge of their own health care. To learn more about them, visit http://www.bendthehealthcaretrend.com
