| Reaching the Consumer Directed Healthcare Holy Grail |
| Executive Advice | |
| By Shawn Jenkins | |
| Wednesday, 18 July 2007 | |
 Managed Care and employer groups hold the keys to success. Integration is often the key factor. Consumerism is the biggest trend in healthcare in 30 years, as the combined forces of federal and state government, the private sector and consumer advocacy groups call for greater healthcare transparency and cost control. CDH plans offer patients more doctor flexibility, large networks and financial control over their healthcare. For employers, CDH plans can expect to reduce premium rates and annual cost increases but are complex to design and administer. Consider an example of an integrated CDH portal in action: An expectant mother, uncertain and nervous of her many health options, uses a CDH portal to give her the best information to make choices. An integrated portal should show which insurance plan is best for her family’s care, the best local labor and delivery hospitals, compare nearby pediatricians, and offer immediate advice on financial planning and spending. Her employer, health plan and doctor communicate electronically, thereby improving care while reducing costs. Providers also benefit from an integrated CDH platform. As consumers spend their HSA monies, the portion of the provider revenue base that depends on direct patient collection will grow. However, most hospitals aren’t prepared. Beyond the monetary aspect, hospitals are grappling with if and how to release pricing information to the public, or quality data with payers as part of pay-for-performance. The key to successful CDH is the integration of disparate systems and islands of information to enable self-service to consumers and benefit administrators. What exactly is the integration challenge? A primary difficulty in supporting a CDH portal is that each product is administered by a separate business entity with only one part of the overall product picture. Consumers will need to track claims records, claims payments, deductibles, funding and expenditures, but no single party has a window through which to view all financial information in its entirety. These challenges have slowed adoption and caused doubt among employers and consumers, as reflected in a recent 2006 survey by The National Association of Health Underwriters. Although 41 percent of respondents claim that employers rate CDH plans as the best way to impact medical costs, only 29 percent are planning to offer them in the next year – representing flat year-over-year growth. Eighty-five percent of respondents cited “enrollment communication and support” as the main barrier to offering these plans. Employers, especially those larger in size, expect certain capabilities such as online tools, a single access point and provider cost comparison from their plan. Eighty-five percent of respondents do not feel that many consumer-directed health plans are adequately provide these tools. While a majority of respondents believe that employees will take an increased role in the decision-making process, 80 percent think that employers will continue to be the primary decision-maker in terms of plan selection. Empowering Employees Consider the typical challenges facing Daniel Island Co., a 150-person resort and development company in South Carolina. HR Manager Jan Malloy’s major concern was dealing with paperwork for her company’s benefit plan. “We were having trouble getting complete forms, tracking down people for insurance cards and getting eligibility information updated,” Malloy says. “Now it’s taming rising premium costs and foreign language barriers, and trying to empower our employees to understand the changing world of healthcare.” Like many companies, Daniel Island wants to provide the highest level of healthcare benefits at the best cost. It offers a high-deductible health savings account, which has been very popular, as well as a traditional health plan. Many of its employees are Spanish-speaking, making multilingual tools and education critically important for optimum healthcare. Malloy explains that by implementing integrated self-service enrollment, billing and data exchange technology, Daniel Island automates its benefits processes, reduces operating costs and errors, improves customer satisfaction and promotes compliance. “We empower our employees to take control of benefit options through a fully integrated and multilingual platform that includes custom configurators, plan comparison tools, electronic enrollment, claims viewing and status, and an all-electronic data exchange,” Malloy explains. “We are next implementing personal health planning, cost comparison tools and wellness resources – and we want it all from one system.” How the consumer manages or mismanages his or her healthcare finances could have long-range implications in later years when the monies are needed most. Health savings accounts are the new 401(k). Following the trajectory of 401(k)s in financial services, industry leaders expect very slow initial adoption, followed by heavy consumer education efforts, further adoption by white-collar workers, and eventual broad adoption in the course of 10 to 15 years. Although HSA adoption is now at 3 percent, it will quickly reach 7 to 8 percent and the tipping point will occur. Eventually HSAs will be mandatory. Banks Play a Part Due to the growth of HSAs, banks are beginning to play a big part in CDH. The HSA introduces banks to a new challenges: supporting and integrating with health carriers and providers and their customer support services. Health plans will likely deal with many HSA banks; reusable back-end claims-processing and payment systems are a must for a viable integrated platform. Take, for example, HSA Bank, which manages more than 150,000 accounts and nearly 29 percent of the almost $1 billion reported in HSA deposits nationwide. The industry leader in terms of HSA volume and deposits, it offers an integrated platform that guides consumers in the purchase and management of their healthcare and healthcare finances. Accessible via the Web, it includes an online banking, electronic group and account setup, electronic employer/employee contribution administration and consumer education tools. This integrated approach benefits not only consumers and businesses, but health plans seeking to offer a complete CDH product. According to Forrester, in a truly integrated platform, the consumer sees his or her health plan and HSA administrator as one entity. The CDH portal stitches together health plans and banks to allow payment transactions, enrollment and services business processes, online account management and decision support. A number of key interfaces must integrate to provide a comprehensive CDH support solution: • Enrollment, renewals and consumer maintenance • Personal health and wellness • Personal healthcare finance planning and management • Provider payment authorization and payment events The smart health plan and employer groups are building on the administrative functions of a CDH portals to include disease and care management for consumers. CDH portals will continue to add new levels of interactivity and personalization. CDH has the potential to deliver smarter and cheaper healthcare, but only if the wealth of data held hostage in health plans, providers and other third parties are brought together. Years of mistrust between insurers and providers must be overcome. Hand-in-hand with information technology is a shift in mentality. Doctors can’t be insulted if consumers ask questions, compare prices and service, and shop. Health plans should view their role as more health advisor than cost container. Consumers can only be empowered through knowledge. The long-term vision for a CDH portal is that the educated healthcare consumer is best served by aggregating data and management tools, and by introducing new automated and electronic processes from banks, health plans, providers and business process vendors. Shawn Jenkins is co-founder and CEO of Benefitfocus, a provider of consumer-directed healthcare software and data-transaction services, used by 100,000 employer groups and 150 insurance carriers, touching 40 million insured consumers.. He can be reached at 843-849-7476. |
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