Consumer Driven Health Plans
What's the most economical health plan? The research is in, and here's an important number for employers: $9,700. That's the average cost savings per employee over a five-year period for workers enrolled in a Consumer-Driven Health Plan (CDHP) compared to employees who were enrolled in traditional health plans. In addition, in the first year of switching to a CDHP, workers had 16% lower medical costs, compared to employees in traditional plans.
These stats are based on the sixth annual Cigna Choice Fund Experience Study. The study compared individuals enrolled in a CDHP to those in traditional plans like a PPO or HMO. The results go a long way toward confirming what many forward-thinking companies already suspected: CDHPs are the most effective long-term strategy for keeping rising health costs at bay.
Here are some of the other highlights of the Cigna study:
• Employees with a CDHP who were enrolled in a pharmacy management program had 14% lower pharmacy costs than workers in a PPO/HMO.
• Workers with a CDHP went to the emergency room at a 13% lower rate than workers in traditional plans.
Also, employees who were enrolled in CDHPs sought preventive care more frequently, were more likely to participate in a health risk assessments or coaching programs, and were more likely to compare medical costs than individuals with PPOs or HMOs
Not a cure-all
Of course, a CDHP isn't a panacea for rising health costs. It's simply a plan design that, when combined with proper employee education, gives employers the best shot at controlling costs year after year.
Whether you're moving exclusively to a CDHP or offering it as another plan option, here are proven ways to get the most out of the plan:
Financial help. CDHPs are coupled with health-based funds like health-savings accounts and flexible spending accounts. When employers contribute to these accounts, it goes a long way toward boosting employee satisfaction and participation in a CDHP. It also helps to offer incentives for things like health risk assessments and biometric screenings.
Continuous education. Consumer-driven plans are most effective when employees are well-informed about the plan's ins and outs. That means employers can't just rely on open enrollment to let workers know what the plan includes and what they should be doing.
Year-round communication is vital. After all, the aim of a CDHP is to help consumers – your employees – make the best informed healthcare decisions. The more data, facts and figures you arm workers with, the more likely you'll be to accomplish this.
Also, it may be worthwhile to vary your communications for different age groups. Example: Younger employees may want social media updates, whereas older workers may prefer more traditional communications.
SESCO Management Consultants is available to assist with your human resource issues. You may contact us by phone at 423-764-4127 or by email at sesco@sescomgt.com.