HSAs

Considering a Consumer Driven Healthcare Plan?
What Clients Should Know?
by Jane Cooper

Moving from a traditional health benefit plan with co-payments or low deductibles to a consumer-driven health plan (CDHP) is a significant benefit change. There is only one opportunity to prepare for it and only one opportunity to make it successful. The decision to make significant benefit changes should be like any business decision. It should be made after thoughtful analysis and with specific objectives in mind, such as:
• Where do companies fall short in this process?
• How can you avoid a failed execution?
The following are some tips to consider as you and your clients proceed down this path.

Thoughtful Analysis

There are many reasons for a company to move to a CDHP. At the top of the list is better management of increasing healthcare costs. In order to understand better management, you and your clients should review their premium or claims funding increases over the past two to three years. What have those increases (or decreases) been and what has affected them? Your data reporting and management tools provide significant detail covering a variety of areas. You can only understand what your projections should be by looking back at the past.

Tools For Employees

When employees have high deductibles, they begin to ask what healthcare services will cost them. They will be interested in information on quality, which is often difficult to find. But, it is absolutely essential to help employees and their families become better healthcare consumers. Do your clients have resources they can turn to for this information? Employees who receive cost and quality information before a procedure or test choose the lower-cost provider more than 40% of the time. This saves money for the employee and the employer (your client!). Employees can be engaged, but your clients need to provide the tools. An advocacy company that provides cost and quality information should be retained when implementing a consumer driven healthcare plan.

Are Employees Listening?

There are three key pieces to CDHP success: “communication,” communication, and communication. You cannot be successful without a robust communication plan. The plan should include electronic and hard copy materials. It should engage the employees and their spouses. Convince your clients to launch the campaign at least six months before implementing a CDHP. Use materials that are written at a sixth-grade level with pictures and graphics. It is recommended to hold mandatory employee meetings to explain the new program and benefits.

Explain The Big Picture

No one wants to see their deductible increase from $500 to $1,500 and no one really wants to hassle with setting up a health savings account. So, you need to give your clients the language and context to make the business case to their employees including the following:
• Why is my company doing this?
• What effect do my individual healthcare costs have on my company’s total costs and profitability?
• Explain to employees that there is less money available for salary increases and other things when the company pays more in healthcare costs.
• Explain to employees that we all have to become more aware of how to manage our healthcare in the current economic environment.

Become the Benefit Consultant Known For Your Expertise And Success

Many brokers and consultants claim to be experts in this area. You can actually be an expert. Document the results of your clients who have implemented a CDHP and achieved significant enrollment in that plan. Get clients to agree to tell their stories – featuring you in a starring role. And provide communication materials to your clients to tell your story.

Implementing a Consumer Directed Health Plan (CDHP) -- Five Tips for Success

If your company is considering a CDHP, there are several steps that you can take to increase the likelihood of success with this strategy. They are as follows:
1. Define success – What effect do you expect this program to have on your healthcare trends?
2. Successful CDHP clients work with their benefit consultants to understand what will affect healthcare trends and how to insert quarterly data points to measure them.
3. Create a significant financial incentive for employees to choose the high-deductible plan. Employees know that they will have to pay more at the time of service with a high deductible plan, so there has to be a reason for them to choose that option. Give them that reason by creating a large premium incentive to do so.
4. Communicate clearly and often -- It is always easier not to change, particularly if the choice that represents change has not been clearly explained. Employees and their families have to understand a CDHP in order to use it successfully. Develop simple communication pieces and distribute them on a monthly basis beginning at least six months before the effective date of your CDHP.
5. HSA banking arrangements -- The bank that is administering the HSA plan for your employees should have clearly written and readily available materials on how to set up the HSA account.
6. Give employees specific and relevant cost and quality information
In order for your CDHP to produce results, your employees need to become better healthcare purchasers. They need to understand cost and quality information and make pro-active choices based on that information.
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Jane Cooper is founder, president and CEO of Patient Care, which she launched in August 2001. For three years, Cooper was the CEO of Community Physicians Network in Madison, Wis., where she led a financial turnaround of the regional Independent Physician’s Association. She also founded Advantage Health Plan, a regional PPO, HMO, and Medicare HMO, headquartered in New Orleans, La. She was president and CEO from 1989 to 1997. Advantage launched one of the first Medicare HMOs in the Gulf South. Ms. Cooper has served as a preceptor for the Department of Health Systems Management of the Tulane University School of Public Health and Tropical Medicine.
Cooper has served as the chairman of the American Association of PPOs. She has authored many articles on healthcare, benefits and insurance. She earned a B.A. from Augustana College in Rock Island, Ill., and an M.A. from Western Illinois University. Patient Care helps employees navigate the healthcare system and become better healthcare consumers. Clients include Assurant Health, Harley-Davidson Motor Company, Coors Brewing, Briggs & Stratton, Regency Hospital Company and Midwest Airlines. For more information, visit www.patientcare4u.com or call 414-271-1790.