Consumer-Driven Health Care

Staff: Jon Gabel, Heidi Whitmore and consultants (Thomas Rice and Anthony LoSasso)

Funding: The Commonwealth Fund

Period of Performance: 2002-2003

Article: Consumer-Driven Health Plans: Are They More than Talk Now?(Health Affairs web exclusive)

With the retreat of “heavy” managed care—that is, the significant decline in HMO enrollment—employers and insurers are seeking new models to control the cost of health benefits. One approach being touted by some as the “magic bullet” that will help control health premium increases, while simultaneously giving employees greater choice and more involvement in their own health care, is commonly referred to as “consumer-driven health care.”

Proponents of this model suggest that consumer-driven health plans could potentially:

  • Control costs and enhance efficiency.
  • Increase the choices available.
  • Allow for greater consumer involvement in health care.

Consumer involvement should increase because individuals, rather than employers or health plans, will be responsible for key decisions about coverage and care. This involvement will be facilitated by the growing variety of information about health plans, providers and treatment regimens available on the Internet.

There are a number of potential pitfalls, however. These include:

  • Concern that consumers are unwilling or unable to use the necessary information to choose the health plan that is best for them.
  • Fear that employers will, over time, contribute less money to their employees’ coverage, raising out-of-pocket costs for workers and potentially uninsurance rates as well.
  • Concern that low-income workers with less generous coverage will forgo use of necessary services.
  • Difficulties involved in adjusting premiums for health status in companies that offer more than one health plan.

“The term consumer-driven or consumer-directed refers to health plan design. Such plans generally involve a greater role for employees in choosing providers and health plans and in designing their own benefit package while assuming greater financial risk. Web-based medical information tools are a key element of consumer-driven plans and are viewed as essential for creating more-knowledgeable consumers of health care.”

—  “Consumer-Driven Health Plans: Are They More than Talk Now?”
Objectives

The objectives for this project are to:

  • Increase our understanding of the implications of a “consumer-driven” system of health benefits.
  • Document the current state and future direction of consumer-driven health care.
  • Conduct case studies of the experience of initial employers and insurers who have adopted consumer-driven health care products.
  • Understand the likely response of employees and employers to consumer-driven health care strategies.

Tasks

There are three main tasks for the project:

  • Interviews with 40 executives representing various stakeholders.
  • Case studies of employers who are early converts to the consumer-driven health care model and one case study of an insurer that now sells a consumer-driven product.
  • A survey of approximately 2,000 employers across the country. 

Products

The project deliverables include three journal articles (one of which has already been published in the journal Health Affairs), and a chart book for the Commonwealth Fund web site.