In 2005, any of the 20,000 U.S. employees of publisher Reed Elsevier Inc. are eligible to participate in the company's new consumer-directed health plan based on the health savings account.
By offering the benefit, Reed Elsevier has put itself in a vanguard of employers testing out the recent paradigm of consumer ownership of health care dollars.
"It's not difficult to offer this, so we said, 'Why not?' We didn't want to stand in the way of employees who wanted to try it," says Anne Silverman, vice president of Compensation and Benefits for the Americas, at Reed Elsevier. "It's an incredible tax-savings vehicle, has the potential to lower costs, and gives individuals more decisional power."
By now many large employers have already at least considered offering such plans, and many are planning for implementation in 2006 and 2007.
But as with any success story, especially the overnight ones, come questions. Have we seen enough results from these plans to justify quick migration to them? Are critics and consumer groups right that there will be an element of cost shifting and adverse selection that will hurt those most needing affordable benefits? Will consumers have the discipline to use the plans wisely, and will they have enough guidance for their health care decisions to really start to make an impact on quality and expenditures in the system?
"The overall message is that employers are very excited about the opportunities provided by health savings accounts," says Susan Relland, legal counsel on health policy for the American Benefits Council.
"Employers took several years to get comfortable with the idea of consumerism, but they are now viewing the health savings accounts as a flexible tool, that can be used for different purposes," says Meredith Baratz, vice president of marketing and product design at UnitedHealth Group.
These new kinds of plans require the insured individual sign up for a high-deductible health plan and open a health savings account. The annual contribution limit on the health savings account and the amount of the deductible that follows it must match. Thus, employers can set the amount of their contribution by controlling the amount of the deductible in the high-deductible health plan.
At the moment, most employers are funding the accounts, according to the ABC.
"Employers who made the decision early last year to offer a health savings account-based plan tended to fund the account and see it as a total solution. Those who adopted later in the year tended to just make their existing high-deductible health plans compliant and point employees to health services account providers," said Baratz.
The hope placed in consumer-directed plans is that consumers will make better choices about whether to get care, and when, how, and where to get it. But for individuals and families to step up to this more discerning role, they must have the information needed to make these decisions well--and therein lies one of the biggest challenges for consumerism in health care.
The next step for this strategy will be finding information technology that puts actionable cost and quality data into consumers' hands.
-Large insurers have begun to provide online resources to subscribers to help them determine the costs of different types of medical procedures, as well as of other expenses such as ongoing care of various chronic conditions.
-To make comparisons, though, patients also need a type of information even more daunting to provide--usable quality data on different providers. Even for large health plans, this has proven a difficult hurdle to overcome, and proposals have included use of national-level data on Medicare malpractice, or other types of claims.
"Consumers need tools to do research," says Elizabeth Sell, a spokeswoman for consumer-directed health care at Aetna, which has taken another kind of step for subscribers by identifying a special network of its providers who have demonstrated effectiveness in clinical performance and cost efficiency.
Called Aexcel, this subset of Aetna physicians and practices is now available for a dozen specialties in nine markets around the country. Other carriers have also created these tiered networks of efficiency subgroups, and may increasingly provide incentives for members to choose them.
In addition, technology efforts are incorporating information on drug prices (including generic alternatives); better tutorials on enrollment options; real-time tracking of health account balances; and integration with point-of-sale card payment and adjudication, to remove administrative hassles and give a better, more immediate sense of cost and value.
Because of their lifetime portability, health savings accounts are consistent with the current political theme of an ownership society, which emphasizes individual control and individual ownership
"Part of the larger question with a health savings account is whether it's a savings vehicle or a spending vehicle. I'd like people to think of it as a place where they save their money rather than spend it," says Baratz.
She says that these accounts will likely coexist, and be used in combination, with health reimbursement accounts, medical savings accounts, and other types of accounts.
March 1, 2005
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