The health insurance industry is more complex than ever thanks to the rapid erosion of the traditional health care model, a surge in high-deductible plans and a major shift toward consumer accountability.

According to the Kaiser Family Foundation, the average deductible climbed to $1,217 in 2014—an increase of 47 percent in just five short years. In addition, Commonwealth Fund researchers found that premiums for families with employer-funded insurance rose 73 percent while premium contributions by employees soared by 93 percent in the last decade.

The avalanche of health care choices and responsibilities has forged a new world for consumers who aren't only facing ever-increasing deductibles, but also tasked with understanding a growing number of services and accounts. Consumers need to better understand all of their options, become more educated about the benefits they choose and stay fully informed about what their decisions mean for their health (and their finances).

Combatting a Common Misconception

As we continue to ask individuals to shoulder more financial responsibility for their health care needs, there's a fundamental mistake we first need to address as an industry: The belief that individuals understand health care as it stands today. They don't.

Between deductibles, out-of-pocket limits, co-insurance, health savings accounts, flexible spending accounts, and all the other terms we throw at them, the typical consumer doesn't understand the ins and outs of their health care policy. While they might know if something is covered or not, they still aren't 100 percent sure what all of the numbers in their bill, health statement and/or explanation of benefits documentation actually mean.

This lack of understanding leads to a state of consumer confusion, which will only intensify as changing health care economics make them increasingly accountable for health care decisions that directly impact their wallet. So what can we do to help consumers achieve clarity?

Taking a page from the retail and financial services playbooks, the health care industry needs to put the consumer first and rethink its approach. Forward-thinking organizations have driven many advances over the last several years to embrace the concept of health care consumerism—and, as an industry, we need to continue that momentum toward consumer-driven health care.

Answering the call for consumer-centric health care experiences starts with four core components:

1) Welcome consumer perspective

Health plans, benefits administrators and employers all need to proactively seek out consumer feedback. Going beyond delivering what a consumer “might” want or need and finding out what questions they need answered, which resources will resonate, and which formats are easiest and most logical for each consumer will be the true consumer-driven health care nirvana.

Consider hosting quarterly lunch-n-learns to invite direct employee feedback, discuss any potential misunderstandings and encourage ongoing dialogue. Consumers need to be heard, and waiting until the next open enrollment period nullifies many of the educational opportunities. We need to ask consumers what tools they need, analyze which resources are accessed most and dig into the most logical way to help guide consumers and give them the confidence to make informed health care choices.

2) Focus on the financial ramifications

Consumers are now bombarded with wellness and incentive programs, as well as new types of health care accounts—from health savings and flexible spending accounts to health reimbursement arrangements. The interaction between all of these pieces can be extremely overwhelming for the average consumer. Health plans and administrators must connect the dots for all of these programs and make sure consumers can get the information needed to make prudent financial decisions.

Understanding the amount that they owe for a service, as well as the alternatives that could save them money, is absolutely critical as consumers take on more of the health care costs. Eventually, health care decisions will be a day-to-day financial experience. Core elements already embraced by consumers in the personal/retail banking industry like debit cards and online bill pay will become common in the health care evolution.

For instance, most consumers know that they need to have enough funds in their checking account before swiping their debit card at the grocery store. The same fundamental concepts must be applied to their financial health care accounts. The win-win will come when consumers truly understand what they need to do and the best way to pay to get the proper level of care—weighing the economics before making health care decisions. When consumers start to ask if they really need that MRI or if the X-ray is sufficient, we know we're on the right track.

3) Deliver continued education

With more financial responsibility comes a higher expectation of continuous, exemplary support. Consumers are demanding more from the health care system than ever before—from financial tools, educational resources and reimbursement visibility to 24/7, personal support and advisory services just a click or phone call away. Give consumers a wide range of mechanisms to get fast, complete answers to their questions (be it a nurse hotline, provider cost/review tool, or rapid access to service/cost calculators) so they feel empowered in the months/years ahead.

4) Support the consumer-first evolution

Benefits brokers and administrators can gain a sharp competitive edge by proactively shaping the consumer experience. Consumers' questions and needs will surely change and evolve over time. The constant is that consumers value organizations that think differently and deliver an unparalleled consumer experience. Ally Bank, Amazon, Uber—there are so many examples of cross-industry disruptors with this common foundation.

The health care market is tough. Many flip insurance every year and brokers change all the time. Provide educational programs, comprehensive support and customer service models that help your client—they will come back. Give them simplicity and ease of access. When consumers and employers feel empowered, you will earn loyalty and realize the advantage of increased retention.

Guiding an evolution

Economics will increasingly drive consumer behavior as the health care industry continues to change in the coming years. The dynamic between health care providers and consumers will further shift as financial pressures rise. If we, as an industry, focus on empowering consumers and sharing helpful information, consumers will quickly become more educated, embrace their role in health care decision-making and better understand the potential tradeoffs.

The CDHC evolution is upon us, and there's no stopping the convergence of health care and banking. Consumers need to become self-motivated and receive the education needed to make proper health care decisions.

Meanwhile, employers and health plans need to empower consumers to confidently take control of their health care spending. Giving consumers easy and direct access to educational tools they need to make sound choices will also improve the user experience, create ongoing engagement opportunities and drive consumer loyalty. Be ready for informed consumers who ask more questions and take an active role in financially driven health care choices.

Instant Insights /

Consumer Driven: The Big Shift

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