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Considerations for Designing Consumer-Directed Health Plans

Consumer-directed health plans require benefits that strengthen a beneficiary's financial decision making and increase preventive care access.

Consumer-directed health plans require financial decision support and preventive care benefits

Source: Thinkstock

By Thomas Beaton

- Employers and health plans are rapidly adopting consumer-directed health plans (CDHPs) as a way to lower benefit costs and encourage cost-effective care utilization among beneficiaries.

CDHPs are becoming part of many US employers’ efforts to lower rising employee insurance costs, according to the National Business Group on Health (NBGH). NBGH believes that nine out of ten employers will offer at least one CDHP option to their employees in 2018.

In order to create CDHPs that offer balanced financial benefits to both payers and their beneficiaries, CDHPs and related high-deductible health plans (HDHPs) must include tools and educational materials that help members access healthcare services when needed and make positive healthcare decisions.

Since CDHPs and HDHPs are financed through a high-deductible, low premium design, a health plan consumer should be encouraged to spend on efficient and useful services.

Payer organizations should build their CDHP offerings around components that incorporate financial security for beneficiaries, encourage low-cost preventive care, and effectively engage beneficiaries with their CDHPs.

Combine employer-sponsored HSAs or HRAs with high-deductible insurance

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A health savings account (HSA) or another type of health reimbursement account (HRA) allows beneficiaries to actively save for necessary services. Payers can allow employers to integrate an HSA or HRA into their CDHPs so that employees can save money specifically for healthcare expenses.

HSAs may be most attractive to younger beneficiaries that may not need to spend a lot on health insurance immediately. Beneficiaries under the age of 65 with a CDHP or HDHP qualify for a tax-advantaged HSA, which can be useful for members who are more likely to budget for higher-cost services, the Mayo Clinic suggests.

Beneficiaries that choose a HDHP or a CDHP may need educational guidance and resources on how to best manage high healthcare costs.

Research from the University of Michigan found that most HDHP and CDHP beneficiaries require additional education or professional guidance to help make financially sound healthcare decisions. Payers may choose to supplement an employer-sponsored HSA with educational guidance on what benefits are covered and where to seek out cost-effective care, as well as which screenings, tests, or services should not be put off despite the potential expense.

Offer subsidized or free preventive care services and related wellness benefits

CDHP beneficiaries need benefits that can encourage healthy behaviors and lower the chances of more extensive health service utilization. Chronic diseases that are avoidable through through preventive care account for 75 percent of the nation’s healthcare spending and lower the US’s economic output by $260 billion a year, the CDC found.

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Health plan members with a CDHP are at risk of neglecting preventive services because they may lack education about their benefits and what services are covered. Payers may want to ensure that out-of-pocket spending doesn’t lead to worsened health by integrating behavioral and mental benefits into preventive care coverage, lowering cost-sharing totals on preventive services, and providing detailed preventive care educational resources.

The most sought-after and effective wellness and preventive care benefits to consider adding to health plans include financial incentives for participation in healthy behaviors, subsidized use of wearable devices to monitor health conditions, and chronic disease care with biometric screenings.

Invest in consumer engagement platforms and communication tools

Payers are quickly adopting consumer engagement platforms that leverage consumer feedback and intuitive technologies so that members can receive communications with health plans via prefered methods.

David Biel, the US Leader for Health Plans consulting at Deloitte, believes that shifts in the health plan consumer base and digital consumer demands are going to allow certain health plans to stand out from competitors and allow beneficiaries to manage their healthcare decisions through on-demand technologies.

“The healthcare system has the opportunity to evolve the two aspects together — to try to leverage the next gen technologies with this new set of beneficiaries to find new and better ways to coordinate care through connected devices and next-gen technologies to try to move the care model and change the care model and drive it more in the home, not in the hospital,” Biel said.

READ MORE: Wellness, Preventive Care to Drive Employer Health Plans in 2018

Payers can effectively engage with CDHP plan members by leveraging their beneficiary data and using analytics to developed targeted and tiered communications, says April Gill, VP of Analytics Solutions at Welltok.

Gill and her team found that health plans were able to increase flu-shot utilization by 65 percent after using a targeted engagement campaign within their organization.

“Providing communication in a way that individuals can actually receive that message is really critical,” Gill added. “Some health plans reported an 80 to 90 percent follow up by using a more targeted approach to outreach.”

Payers can boost beneficiary engagement with retail experiences that make it easy for consumers to navigate health care options and leverage marketing outreach data to engage with thousands of beneficiaries at a time.

CDHP offerings are expected to gain traction as a payer industry trend in 2018 and could help payers lower costs through a high-demand health plan offering.

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