 Consumer-directed
health plans: mixed reviews
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Are consumer-directed health plans all that they're hyped up to be?
The Government Accountability Office just released
a report
on the early experiences of enrollees in these types of plans. The
enrollees had voluntarily signed up for these low-premium, high-deductible,
health-care plans, and they reported generally positive experiences.
However, they acknowledged that these plans are not for everyone.
But get ready, they're coming. Since their introduction in January 2004, consumer-directed health plans (CDHPs) have become an emerging trend. Participation in these plans has grown to more than 5 million this year, according to Milliman, a consulting firm. While this only represents about 3 percent of the workforce with private health-care insurance, the momentum is expected to build as companies look for ways to cut costs. It's the American way.
Whether CDHPs are a new-and-improved form of health-care benefit or a big rip-off depends on your circumstances and perspective. Do you have a chronic condition, require regular prescription medication, or have dependents on your plan? Then this plan may be all wrong for you.
Are you relatively healthy, both physically and financially? This plan may be perfect for you.
In other words, it's the perfect health-care plan for those who have a lot of cash flow and very little need for health-care services.
A misnomer
Consumer-directed health plans got their name because consumers
are expected to take charge of their health care by negotiating
prices and investigating the quality of health-care providers. This
is supposed to be an empowering experience for the consumer. But
CDHPs really should be called "More administrative headaches
and health-care costs directed-at-consumers plan (MAHHCDCP)."
That's because consumers foot the bills to the tune of thousands
of dollars before any benefits kick in.
Interestingly, the GAO report reveals that few participants in these plans actually researched cost of health-care services before obtaining them. One reason for this could be the dearth of information on the subject of health care quality and pricing. The report states: "Insurance carriers have faced challenges in obtaining or presenting quality and cost data." CDHP participants also reported that they had access to limited information about quality measures for physicians and hospitals, "such as the volume of procedures performed and the outcomes of those procedures."
Researching medical options
I'd like to know when and where we can research fees and quality of providers. On our lunch breaks?
I can just hear it now: a one-sided conversation from a worker in a cube farm within earshot and peripheral vision of a dozen co-workers, trying to negotiate pricing for a routine procedure.
"Hello. I'd like to schedule a colonoscopy with Dr. Klump. What does he charge for this procedure? $2,500!!! Is he planning a trip to Tahiti? Tell him it's not worth a penny more to me than $750, take it or leave it. And, oh, by the way, how many of these procedures did he perform during his career? Did he make any, um, errant perforations along the way?"
The information flow will improve over time. In recent months, some of the larger health insurers, such as Aetna, Cigna, Humana and UnitedHealth Group have made pricing information available online in certain parts of the country. Several states have recently passed legislation requiring hospitals to publicly list prices on inpatient procedures, and some sites are already open for business, including those for South Dakota, New Hampshire, Wisconsin, Oregon and Florida.
Are you feeling empowered yet?
Last month the president issued an executive order for federal agencies to provide increased transparency of health-care pricing and quality information for the benefit of government workers, who represent about 25 percent of insured Americans. The president has a vested interest in seeing this work since he pushed for health savings accounts, which go hand in hand with CDHPs.
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