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Controlling Costs and Achieving Better Health with CDHP
Andy Malinoski June 27, 2006 — 712 views
FSAs, HRAs, HSAs, HDHPs are components of, not the definition of, consumer-driven health plans. As you create a consumer-driven health plan that effectively controls costs and provides access to dollars employees need to acquire quality healthcare, the underlying theme of your plan should be to create an environment of transparency of information.
That will drive behavior change.
There is not a silver bullet to curb skyrocketing costs; but engagement and empowerment should be at the center of your planning.
Here are the key components you should build into your plan design:
Employer Cost Control Must Be Achieved
The healthcare economy is founded on the principle that employers will provide healthcare coverage for their employees. Neither you nor I can revolutionize the system overnight, so consider a plan that will allow you the cost controls you need to continue to be viable in the market where you operate your business. The faster employers receive relief from the rising costs of healthcare the sooner there will be a change in the cost of providing services and benefits to their employees.
Right now, one of the most overlooked accounts that can bring about cost control is a Health Reimbursement Arrangement, or HRA. These accounts are flexible, can be established to have portability to support employee engagements, and allow the employer to control access to the financial resources of the plan.
This solution allows employers to:
- retain more control of their health care dollars
- convert a portion of their cost to a defined contribution and isolate it from premium increase
- experience reduced utilization of their insurance plan
- realize improved well care and preventive coverage
Employee Access to Dollars is Vital
Imagine trying to buy a car without credit or running your household without a checking account. That is what an unfunded Health Savings Account is like for an employee faced with a high-deductible plan.
Under an HRA, the employee is financially motivated and engaged:
- because dollars accumulate year-over-year
- they have access to the financial means to purchase healthcare as they need it
- if structured correctly, they have ownership of the funds you have made available and will spend them more judiciously
Information is an Enabler
Provide information to your employees about the true cost of your healthcare plan.
A single, “open” enrollment meeting once a year is not an answer to getting employees engaged in the healthcare process. Whatever type of plan you put in place, it is vital that your employees are provided factual, non-scare tactic information about the cost and condition of your health plan.
You cannot expect an employee to take an increase in their cost without background information and, once you start communicating information to employees, they will begin to expect it, and that opens up the process for a dialog to occur; also, providing a system to reach out to members of your plan and make sure they know how to use their plan, which will help them become more engaged.
Encourage Behavior Change
Work over the long-term to provide opportunities for the members of the plans to get involved and participate in actively managing their health. On-site wellness screenings, getting rid of the junk food in the vending machines, at company events serve healthy food instead of fried chicken – lead the change by example.
If you are sick and tired of the cost increases, change must occur and it starts with leadership and allocating resources in a manner that your employees have what they need to make better decisions.
Andy Malinoski is Vice President of Marketing and Communications for Vested Health. Joining Vested Health in January 2006, Malinoski is an advocate for consumer-driven plans based on real life experience with health care benefits professionally as an employer and personally as a father of three children. Andy oversees the account management, media relations and educational material development key to providing consumers information about how their health plan works and the benefits available to them through their Vested Health plan.