The shift to health care consumerism is well underway. Trends continue to point to increased financial responsibility for consumers with rising deductibles, increased consumer out-of-pocket responsibilities, and accelerated adoption of consumer directed health care plans (CDHPs), health savings accounts (HSAs), and other account-based benefit offerings.

According to Mercer, enrollment in CDHPs among large employers nearly doubled in the past three years from 15 percent to 28 percent of covered employees.

Employer adoption of these consumer-directed benefit designs will continue to grow for the foreseeable future, driven by the need for cost control, the impact of health care reform and the looming excise tax. The costs of providing health care continue to rise, surpassing $25,000 for an average family for the first time in 2016 (Milliman Medical Index).

However, the fact that the term “consumer directed health care (CDH)” has become almost synonymous with CDHPs and HSAs is a bit of a misnomer. In reality, CDH is much more than a benefit design – it is a paradigm shift for how consumers must manage their health care and make health care decisions going forward.

Dimensions of consumer-directed health care

The underlying premise of CDH is that, if given more financial responsibility for health care and empowered to make informed decisions, consumers will make better choices – leading to improved health outcomes and decreased overall health care costs. Implicit in this definition are two equally important dimensions:

Benefit designs that require increased consumer financial accountability
Empowerment and engagement to support decision-making

The market has made considerable progress shifting to benefit models that increase consumer financial responsibility, as evidenced by the data above. While new plan designs have been created and successfully implemented, financial accountability is only the beginning— behavior must change too, not just costs. We have only just begun to unlock the second dimension of health care consumerism.

Giving somebody new responsibility without the education, tools and support to manage those responsibilities is like giving a teenager the keys to the car without teaching them to drive.

Unlocking consumer engagement

So where does the health care industry really stand in terms of engaging and empowering consumers to make better choices? The health care industry is still struggling to drive meaningful consumer engagement.

Consumer fluency is low. Alegeus research is clear that consumers still don’t have a good grasp on how the plans work, how to predict and manage out of pocket costs, how to determine coverage, etc. Engagement overall is low. The average consumer interacts with their health plan just one or two times per year – and more than 40 percent of members have never taken the time to log-on, dial-in, subscribe, or download any content from their benefit providers.

And in many cases, consumers are resistant to change. When asked whether they wanted to take a more active role in managing their health care, 50 percent said no thanks.

Employers are now spending nearly $700 per employee on various employee engagement programs related to health care, per Fidelity. There are more tools and resources than ever before. Yet most of these programs are delivered with a “one-size-fits-all” approach, and the consumer experience is still very fragmented.

However, by its very nature, CDH may be the key to unlocking consumer engagement. CDHP members are significantly more engaged than their counterparts in traditional coverage for one very important reason…

People pay attention to their money

According to our research, people enrolled in CDHPs scored universally higher on all measures of engagement. CDHP members:

Are considerably more fluent in the details of health care coverage, costs and billing
Are more value-conscious - 50 percent more likely to research and compare costs for health care purchases
Interact more frequently– the average CDHP member interacts with their account 10-50 times per year
Leverage available resources & channels - one third more likely to consume content and engage with their benefit service providers through available channels
Are more likely to participate - twice as likely to participate in employer engagement and wellness programs

Although CDHP members interact more frequently, the key to true engagement and behavior change is not just driving more interactions, it is driving strategic engagement that is targeted, timely and relevant.

Health & wealth must converge

The path to true, meaningful engagement in health care may lie in the convergence of these financial components with the traditional health care domain. No matter what age, health status, or consumer segment, the responsibility for managing finances and costs will become universal.

The convergence of claims, financial transactions and other behavioral and demographic data will provide a robust foundation for targeted engagement.

The fact that consumers pay closer attention to their finances presents a unique opportunity to tap into a captive audience with personalized offers, messages and value-added tools designed to improve engagement, influence behavior and enhance decision-making.

For the vision of consumer directed health care to be fully realized, it is imperative that employers and benefit providers do not overlook the critical importance of education and targeted engagement to empower better decision making – and better outcomes for all stakeholders.

Instant Insights /

Health care consumerism is more than a benefit design

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