US healthcare - the power of the consumer
Healthcare delivery in the United States (US) is headed for a paradigm shift. Market forces are dictating a change in how employers and employees alike perceive healthcare.
In the US, the cost of health benefits has increased by double digits over the past three years and is expected to continue to increase in the low teens for the foreseeable future. For US employers there is a real sense that changing plan designs and cost-shifting can only do so much to impact these costs. Many are left asking: “What do we do next?”
Consumer Driven Healthcare Platforms and Wellness Initiatives (CDHPWI) can offer an answer.
Key in creating the high costs has been an increase in utilisation and the basket of solutions and services available to consumers. Therefore, employers that provide healthcare to their employees are realising the cost of insurance is ultimately driven by an employee’s use (incidence and severity of health claims, the cost of administration, trend). It is clear that if the employee’s demand for healthcare is not decreased, costs will continue to escalate. Because of this, the age of consumer awareness has taken flight in the US, and leading employers are embracing concepts such as CDHPWI to reduce the demand for healthcare.
Consumer driven healthcare models, in the pure sense, are designed to enlighten customers to make the best healthcare decisions, balancing the economics and the efficacy of the care provided. It has created access to health care tools and information in a dynamic way that assists the employee in seeking services and providers. With the tools available patients are turning into savvy consumers of health care.
Part of this transition has been due to the use of a healthcare account or a Health Savings Account (HSA). An HSA is a bucket of money that the employee is allotted to manage the routine costs of care. If the employee uses the money wisely, they can roll the balance over at year-end and use the surplus to pay for future healthcare costs. Because of this, users of HSAs consider the cost/benefit more carefully before going to the doctor. On average, this has reduced unnecessary office visits by between 15-25%.
The more advanced consumer driven models also have access to health risk assessments and health coaching. The purpose of the health risk assessment is to help an employee identify lifestyle issues that are perhaps risky and may lead to short- and long-term susceptibility to disease. If a person is seen as high-risk, typically there is an outreach to the person by a healthcare professional to help them understand how to modify their behaviours and seek options and access to care.
The results of these programmess, while only 24-36 months old, have lowered healthcare trends from an average of 27% over the past two years to 4% or less. The plans have a high degree of acceptance and a participant satisfaction rate between 90%-95%.
With these compelling results, leading US employers are now turning their health plans into a competitive advantage. The win for the employer and employee, and the track record of financial efficacy, are truly compelling reason to take a serious look at CDHPWI.
Kevin Overbey is managing partner, international business at Clearpoint, an employee benefit consultancy based in Seattle, Boston and Portland. Clearpoint is a member of the ASINTA network