Right now, consumer-directed health plans (CDHPs) are at the top of the list of key cost management strategies. For employers looking to build a health program that’s sustainable over the long term, a plan that’s designed to change employee behavior — to make them better health care consumers — has a lot of appeal. So much appeal that we’ve seen the percentage of covered employees enrolled in CDHPs more than double over the past four years. In 2014, nearly half of all large employers offered a CDHP, and 23% of their employees were enrolled. By 2017, 66% of large employers expect to offer a CDHP.
Fueling both the growth in offerings and the growth in enrollment is a better understanding on employers’ part regarding how to make consumerism work. Employers are asking employees to take on an increasing amount of financial responsibility in all types of plans, not just CDHPs. In a consumerism strategy, high deductibles are meant to give employees a financial incentive to shop more carefully for health services. The growing availability of transparency tools is allowing employees to compare health provider price and quality information and factor cost into their decision-making.
In our latest Mercer survey, more than three-fourths of large US employers say their employees now have access to this type of information, either telephonically, on the web, or through a mobile app. While the transparency tool is most often provided by the health plan, 12% of large employers contract with a specialty vendor to provide these services.
Despite the availability of transparency tools, a new Kaiser Family Foundation poll shows consumers are not using the available data to make health care decisions. Here are a few interesting findings from the poll:
- 23% reported seeing information comparing the quality of doctors and hospitals in the past 12 months; only 10% used the information.
- 12% reported seeing prices among different doctors and hospitals in the past 12 months; only 5% used the information.
- 64% say it is difficult to find out how much medical treatments and procedures would cost.
But the difficulty in locating price information may not be the only hurdle employers face in increasing employee usage of transparency tools. The poll found that people are overconfident in their ability to pay for health care expenses. The majority of people said they have enough insurance or money to pay for usual medical costs and an unplanned hospitalization. But when asked how they would pay for a $500 medical bill, 27% would have to use a credit card or borrow money, and 20% said they wouldn’t be able to pay it at all.
There are a few things employers can do to increase utilization of transparency tools:
- Don’t be afraid to over communicate. Employees don’t need this information until they have a health event. You can’t expect a once and done communication campaign to work. Communicate the availability of this information and repeat several times throughout the year.
- Make sure it’s easy to find cost information. If the transparency tools offered by your health plan aren’t easy to use contract with a specialty vendor to provide these services.
- Educate and reeducate your employees about the costs associated with your health plan. Make sure that they understand how the deductible, coinsurance, and out-of-pocket maximums get applied. You don’t want your employees to be overconfident in their ability to pay medical bills.