Health care costs continue to rise with new data indicating that spending on health care is growing at its fastest rate since 2007. In an attempt to mitigate this trend, many employers have been turning to consumer driven health plans (CDHPs). Consumer driven health care, or consumerism, revolves around the idea that consumers should be able to make informed choices about their medical care based on price and quality information. The goal is for knowledgeable consumers to compare prices—choosing more wisely with the end result of lowering overall health care costs for everyone.
Consumer driven health plan (CDHP) enrollment continues to climb as a cost-savings initiative. As further health care reform legislation comes into effect, the number of both employers and employees interested in transitioning to a consumerism model increases. A CDHP has the potential to be very beneficial to your organization by helping to reign in health care costs and improve employee health and morale.
One of the most common consumer driven health plans pairs a health savings account (HSA) with a high deductible insurance plan. An HSA is a tax-advantaged savings account that can be used for your health care expenses. An HSA can help consumers save money and conveniently pay for health care costs. Any unused funds in the account will be rolled over each year.
Consumerism, as it relates to health care, can include a variety of efforts, including strategies such as offering employees the ability to choose among multiple plan options, provider network configurations and rewards based incentive programs that steer plan participants to more effective and efficient health care providers.
Advocates believe that ultimately, a consumerism approach will encourage employees to assume a greater role in managing their own health and the associated costs. Whatever the case, consumer driven health plans can only work when a variety of additional financial incentives and informational programs are introduced, such as preventive care services, wellness and disease management programs and provider cost and quality information. These tools provide employees with the information they need to make the most value-driven choices.
Whatever your needs, SWBC’s Employee Benefits Consulting Group can provide consulting services to help you design and maintain a plan that meets the requirements of your organization. We will provide the analytical support, develop custom communication materials and assess the benefit to your company. We have extensive experience in developing strategies for our clients that include introducing consumerism into employee populations. Click here to request a consultation!