Bridge Out! Consumer-Driven Health Plans will Change How We Get Care

Bridge Out: A road sign you really never want to see. Its appearance in your path means that there has been a failure and that you have to find a new way of getting where you want to go. The rise of consumer-driven health plans indicates that the era of managed care failed to control the increased cost and demand for care and that many things about the way we receive healthcare in the US.

In late August 2006, Wellpoint, one of the nation's largest healthcare insurance providers, has gone on record stating that in 2007 that they will the first insurer to have consumer-driven health plans in all states and for all types of people (from major employers to small groups to individual plans).

"Our customers who choose these consumer-driven products will have new opportunities to lead healthier lives because of this first-of-its-kind national offering," Wellpoint CEO, Larry Glassock

The press release also goes on to share:

"We're empowering consumers through unique and robust online tools and incentives that encourage and reward them for choosing to live healthier lifestyles … Consumers who choose Lumenos will be eligible for intensive preventive care and personal health coaching, as well as smoking cessation and weight management programs. In addition, most consumers will receive financial rewards for completing various wellness programs. "

WOW! That sounds great, right?!?!?! Well, I always read these things and think about what my parents and my in laws know about healthcare / health policy and what they would think.

So for those of you who are not familiar with this new type of health plan, their implementation will produce significant changes in how care is reimbursed. Consumer-driven health plans are designed to shift some of the financial decision-making and responsibility to the individuals who consume healthcare services. Health savings accounts and high deductibles are key components to this new type of health plan. The thought behind all of this is to allow patients to determine how best to spend their healthcare dollars.

If you buy into traditional economic theory as applicable to the healthcare industry, this is not a bad way of trying to control skyrocketing costs. Since the price of services has a direct impact on demand for services, in theory, this type of plan has the potential to reduce duplication of services and unnecessary utilization of higher levels (more expensive) of care. In very simple terms, if patients are required to share some of the financial responsibility of their care, then they are more likely to choose the cheapest, most effective care.

There are at least two very big 'rubs' to this plan. First, in order to be able to make appropriate choices, consumers will need to know the cost of the care. While it seems easy enough, a physician or facilities' billing rate for a service is significantly different than a contracted rate. A a contracted rate or allowable charge is significantly different from the acutal amount paid for services by an insurer or other third party payer. So healthcare consumers will need to understand all of these to be able to make the appropriate choices. Also healthcare providers will need to set up a system to be able to accurately inform the consumer the costs for a service. While this seems easy enough, it becomes increasingly complex when one understands that every, single, solitary insurance plan is different in regards to deductible, copay, contracted rate and reimbursement rate.

Second, in order to be able to chose the cheapest, effective treatment, healthcare consumers will have to know and understand their treatment options. This means that they will need to better understand the science behind their illnesses as well as the science behind the possible treatments. This would be a whole lot easier if we went back to the old world model of having healthcare providers that were able to develop rapport and a trusting patient-provider relationship. In the past, providers were given the time and opportunity to really partner with individuals, understand the complexities of care and develop a truly individualized treatment that best fit the patient / consumer's need. However, in the days of the 15 minute visit, this becomes increasingly difficult to do.

President Bush's recent executive order [] pushing for many things including transparency of pricing information is an attempt to address the issue of understanding the financial aspects.

However, how do we make sure individuals have the information they need to be able to get the best treatment value? In reality, doctors and healthcare providers, because of their ability to understand and evaluate individual cases and circumstances, are the best resources for helping individuals make these decisions. However, they will likely need to develop new ways of doing this that are cost and time efficient. If healthcare providers do not develop these new ways, consumers / patients will be left to fend for themselves.

If consumers do not adequately educate themselves or access resources / advocates that will assist them, then this plan too is doomed. Costs will not be contained, health will not be preserved and access to appropriate, effective care will continue to be compromised.