MarketWatch Consumer - Directed Health Insurance Products

During the past few years, health plans have focused product development on consumer-driven health plans. This paper examines how these products are faring in twelve Community Tracking Study (CTS) communities. Although there has been a proliferation in the number and variety of consumer-directed plan options available, employers have taken a cautious approach. Given the increased financial stake and decision-making responsibility consumers hold when enrolled in these plans, respondents expressed frustration that the availability of information support has lagged behind the demands placed on consumers. [Health Affairs 25, no. 3 (2006): 766–773; 10.1377/hlthaff.25.3.766] A t the t ime o f the Round Four Community Tracking Study (CTS) site visits in 2003, consumer-directed health plans were in their early stages of development. These plans are intended to improve consumers’ health care decisions by combining financial incentives with cost and quality information. This paper focuses on how consumer-directed plan benefit designs are faring in twelve U.S. communities. One common design features a spending account tied to a health plan with a high deductible; consumers retain the savings from making economical health care decisions and use them to offset future out-of-pocket spending.1 A second features tiered provider networks, in which providers are grouped according to their performance on measures of cost and quality, with financial rewards for consumers who choose to receive care from groups that do better on these measures. Few health plans offered consumer-directed products in 2003, and employers questioned these plans’ effectiveness in lowering costs and improving quality.2 During the past two years, Congress established health savings accounts (HSAs), and most large insurers introduced benefit designs based on the spending-account model.3 Health plans and employer benefit consultants developed a variety of methodologies for comparing the performance of health care providers, and a sizable number of vendor organizations developed tools to support consumers’ decision making. Development of tiered-network products continued in some markets.4 7 6 6 M a y / J u n e 2 0 0 6 H e a l t h T r a c k i n g DOI 10.1377/hlthaff.25.3.766 ©2006 Project HOPE–The People-to-People Health Foundation, Inc. Lydia Regopoulos is a consulting researcher for the Center for Studying Health System Change (HSC) in Washington, D.C. Jon Christianson ([email protected]) is the James A. Hamilton Chair in Health Policy and Management, Division of Health Services Research and Policy, University of Minnesota School of Public Health, in Minneapolis, and a senior consulting researcher for HSC. Gary Claxton is a vice president of the Henry J. Kaiser Family Foundation in Washington, D.C., and a senior consulting researcher for HSC. Sally Trude is a senior consulting researcher for HSC, based in Crozet, Virginia. Using interview data from the 2005 CTS site visits, we describe the range of consumerdirected products available in the study communities and discuss factors perceived to be driving their acceptance. We examine employers’ views of consumer-directed plans, including how these views vary across markets and types of employers, and how employers assess progress made in consumer information support. We conclude by discussing the broader implications of our findings. Study Data And Methods The CTS has been described in greater detail elsewhere.5 During Round Five of CTS site visits (January–June 2005), we conducted 1,008 protocol-driven interviews with provider organizations, health plans, purchasers, and the public sector. Our findings are based primarily on interviews with representatives of commercial health plans, large employers (with more than 500 local employees), thirdparty administrators, benefit consultants, and health insurance brokers. In each community we completed multiple interviews at the three largest health plans, based on enrollment, typically including a regional Blue Cross and Blue Shield plan, a national plan, and a local plan. We interviewed representatives from fourteen regional Blues plans, two local health maintenance organization (HMO) Blues subsidiaries, twelve local plans, and twelve local divisions of four distinct national plans. Respondents usually included chief executive officers, marketing executives, and network contracting directors. We also interviewed several national respondents affiliated with consumer-driven health plans and representatives of approximately sixty publicand private-sector employers. Our study elicited viewpoints from representatives of health plans and employers by asking neutral, open-ended questions about each type of consumer-directed plan. As a result, findings represent the range of issues identified by respondents. In particular, health plan executives were asked to describe their full line of products and any changes made since 2003. For new offerings, health plan representatives were asked about the strategic reasoning behind the launch. Large employers’ benefit managers were asked about any plans to offer a consumer-directed plan and their reasons for choosing whether or not to offer a product. Benefit consultants and brokers, representing large and small employers, respectively, were asked about their views on health reimbursement arrangements (HRAs), HSAs, and tiered-network products as well as the advice they give clients. All respondents were asked what decision support and consumer information they would like health plans to provide that is now unavailable. Respondents from health plans and employers offering consumer-directed plans described the information and decision support they provide.