High-deductible health plans are popular among employers because - at a time when health care costs are increasing at an average 10% per year - the plans tend to save companies a lot of money.
Although employees still are coming around to fully embracing HDHPs, First Horizon, a financial services firm located in Tennessee with 4,500 employees, seems to have found an answer to making HDHPs successful: Communication. The company's four-person benefits team, with help from Change Healthcare Corporation, conducted a large-scale communications campaign to boost participation in its HDHP. Originally implemented in 2006, First Horizon's HDHP was one option for employees to choose from, in addition to two PPOs. Participation hovered around 6% to 10%. Following the communication and education blitz, HDHP participation now stands at 26%.
"With changes that came as part of the Affordable Care Act, we had to step back and look at our health plan offerings. As part of our strategy, we wanted to increase participation in the [HDHP] and wanted to provide our employees with tools and resources to help them search for quality care at a lower cost for them," says Kim Anderson, manager of total compensation administration for First Horizon. She estimates that the cost of coverage in an HDHP with a health savings account is nearly 20% lower, on average, than the cost of PPO coverage.
Part of the firm's partnership with Change Healthcare was an education campaign dubbed "Know Before You Go."
"We take claims data and put it into a cost database, look at utilization of common and recurring services, and we look at what you're paying and we shop on your behalf," explains Doug Ghertner, president of Change Healthcare. Whether it's a cheaper doctor across town, a similar medication that could save $90/month or a procedure that is cheaper at a hospital vs. doctor's office, the Change Healthcare system sends personalized emails to employees enrolled in the HDHP, known as the "Transparency Messenger." Participants also receive monthly "Ways to Save" alerts and reminders.
"We learned that at the end of the day, few people seek cost information in health care. But when we send savings alerts, 50% who receive it open the email and come into the portal and do something with it," Ghertner notes. "That ability to engage has been a differentiator, and the message that has resonated."
The push for cost transparency can be a tricky one, with recent studies that show the difficulty in finding out the exact cost of a procedure or medication in advance. Prices in the health care markets reflect physician charges, hospital pricing, prescription drugs, costs for medical devices and diagnostics, and many times vary geographically.
To complicate matters, the amount a patient pays often depends on their insurance plan. With an HDHP, the cost of most health services, other than preventive care, are put on the employee. Thus, an education and cost comparison tool like First Horizon's seeks to eliminate this confusion and make it somewhat easier for employees, even though it may mean switching doctors or requesting a change in prescription.
"We feel strongly that [cost transparency is] half the battle," Ghertner says. "Ultimately, we want [employers] to be confident enough in our tool that they could move all employees into a HDHP and the employees to feel comfortable and cared for."
Of course, HDHPs are not for everyone. Almost half (48%) of the families with chronic conditions in high-deductible plans reported health-care-related financial burdens, compared to 21% of families in traditional plans. Almost twice as many lower-income families in high-deductible plans spent more than 3% of income on health care expenses compared to lower-income families in traditional plans (53% versus 29%), according to a recent study out by Health Affairs in February 2011. (See Editor-in-Chief Kelley M. Butler's editorial this month for more on how the chronically ill view the U.S. health care system.)
Yet, HDHPs' cost savings have driven the plans' growth in recent years. In 2010, more than 10 million people were enrolled in high-deductible health plans linked to health savings accounts, up from 6.1 million in 2008, according to America's Health Insurance Plans. Studying more than 800,000 families from across the United States, researchers for the nonprofit RAND Corporation found that when people shifted into health insurance plans with deductibles of at least $1,000 per person, their health spending dropped an average of 14% when compared to families in health plans with lower deductibles.
However, the same RAND study also shows that families enrolled in HDHPs dropped preventive care. Rates for childhood vaccinations, mammography, cervical cancer screening and colorectal cancer screenings all dropped among families with HDHPs - particularly troublesome as most HDHPs waive the deductible for these types of care.
Ghertner disagrees that people who are medically vulnerable are worse off in a HDHP than any other plan. "The last thing a plan sponsor wants is their people who need care neglecting it, but the people that are medically vulnerable that enroll in HDHP are at no more risk for cutting back on other services."
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