Consumer-driven health plans have been simmering on the back burner of the debate over how to drive down the high cost of health insurance-- and thereby make it more affordable and universally available. The idea behind patient power (a shorthand term for these plans) is simple: If consumers are given an incentive to shop carefully for their health care--a set amount of money to pay for health needs is in a special account set aside for their use--they'll respond by putting pressure on price and keeping a careful eye on the overuse of services. Rather than insist on a prescription for an expensive drug, such as Vioxx, they may opt to take an over-the-counter alternative, such as Advil. They may start asking their physicians to prescribe less-expensive generic medications rather than pricey brand names, and they may even question why they need five tests run on a sample of their blood when one or two might do.
That's the theory at least, and several companies (among them, Humana Inc. and Whirlpool Corp.) and at least one public entity (the University of Minnesota) have logged in a few years of experience with consumer-driven plans as part of the mix of health insurance programs they offer their employees. In addition to the health savings account that their workers can tap to pay for health services (any unspent money rolls over into the next year's account), the plans these entities offer also feature an insurance component. If an employee depletes the money in his health account, he then is covered by a traditional insurance plan with a high deductible, which means, in effect, that the employee pays for the next few thousand dollars of health care out of his own pocket. How much money is placed in the health account, how high the deductible is and how generous the insurance-plan benefits are varies from employer to employer.
It sounds like a reasonable way to see if market principles can be applied to health care. So far there are no definitive answers on whether patient power works to cut costs--or whether the incentive within the concept works as it's meant to--but consumer-driven plans are beginning to attract attention. Mercer Human Resource Consulting reports that in a recent survey of 991 employers, nearly three- quarters said they were likely to offer their workers a consumer- driven plan. Of the companies surveyed, 84 percent employed 500 or more people.
What's given consumer-directed plans a recent boost is a confluence of corporate and government factors. On the private-sector side, Whole Foods Inc., a high-profile grocery chain, converted its employee health coverage to a consumer-directed plan a few months ago. A CDHP is not just one of two or three health-insurance offerings that workers at Whole Foods can choose: It is the only choice. It won employee approval when Whole Foods offered it at no cost; employees do not have to pay any premiums for the coverage.
On the federal-government side, Congress created health savings accounts as part of the massive Medicare reform law passed last December. The accounts are similar to medical savings accounts, which Congress allowed in the 1990s, but they don't have as many restrictions as their forerunner.
As to the states, a few have been experimenting with a variation on the health savings account: consumer-directed personal care programs for the disabled. Under highly successful pilot programs in states such as Arkansas, Florida and New Jersey, a few thousand disabled Medicaid patients have virtually unlimited say over how they want to spend their personal-care dollars. Disabled patients can use the money to buy supportive services, including assistive technologies, a home renovation, a microwave oven or anything else that will make it easier for them to remain in their own homes.
But there is a big difference between managing personal care and making decisions about health treatments. One of the more serious concerns about consumer-directed health plans (and there are several, including equity issues for those with chronic and costly illnesses) is the issue of patients making judgments about trade-offs. For example, is there a point when a patient would be better off taking Vioxx than Advil, and how would she know? While more and more information is available over the Internet, few patients are knowledgeable enough to assess that information and apply it to their own condition--whether to seek care for a set of symptoms or to overrule their physician on a prescription. If and when evidence-based medicine, in which medical experts assess costs and treatments for a particular illness, makes it into the mainstream, consumer-driven plans may make more sense. But for now, patient power may be just another way of transferring medical risk to patients. Surely, this is something state policy makers will want to keep an eye on.
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