Cash-back programs have long been popular with credit card,airline and retail companies that have seen great benefit fromoffering these incentives to encourage customers to use theirservices.

Given their success, it’s not surprising that we’re seeing thecash-back approach enter an entirely new market – the complexhealth benefits industry.

As health care costs have steadily increased,employers expect that their employees act like consumers when it comes tohealth care decisions.

Under consumer-directed or high deductible health plans, thereis the notion that employees will feel compelled to shop around forcare because they are responsible for paying for their own expensesuntil the (high) deductible is met.

However, this is not often the case.

The challenge is that employees, while expected to act likeconsumers, are not savvy shoppers when it comes to their healthcare options.

Most people are unaware that the price of any given medicalprocedure, product or service can vary widely within the samegeographic area – even within the same network.

As a result – to draw an analogy from the retail space – theyare all too often shopping for tube socks at Saks Fifth Avenue whenthey could get the same product, at a much lower cost, at theTarget down the street.

Even when employees are aware of price differences,most have no idea how to research those differences or assessquality differences. Nor do they have the time to do so.

Employees see and seek the savings

To address this need, employers are increasingly offeringtransparency services to their employees – and sweetening the dealby offering incentives.

With transparency services, employees (and their dependents) canrequest a personalized report of their options for elective testsand procedures.

Reports include costs and quality ratings and are based on theindividual’s health plan, geographic area, provider preferences andspecific procedure.

By demonstrating to employees – in hard dollars and cents – howtheir health care choices affect their financial (as well asphysical) well-being, they will make informed decisions that impactthe cost and quality of their care.

Research from DirectPath has found that 82 percent of employeeswho compare costs choose a lower cost provider, saving an averageof $400 per cost and quality service request.

For employees in high deductible plans who haven’t yet met theirdeductible, the savings mean less money out-of-pocket, out of theirhealth savings or health reimbursement accounts.

For those who have met their deductible, they helplower overall costs for the employer.

For employees who need a more immediate, concrete reason to shoparound, incentive programs can help immensely. Such incentiveprograms offer employees a percentage of the savings (typically 10to 20 percent, capped at $1,000) when they choose lower costproviders based on their cost and quality report results.

Over time, employees begin to see the value of routinelycomparing costs for their elective services, as well as for otherthings like prescriptions and medical supplies.

Employers are also increasingly offering employees access tohealth care advocates, who help answer benefit questions, clarifyout-of-pocket costs, help with referrals and authorization andresearch in-network physicians and facilities.

Employers reap the benefits

Of course, when employees save, so do employers. Employers willsee an immediate reduction in their spend and improved memberexperience ratings.

While some employers may hesitate over the upfront cost oftransparency services (typically per person per month), the servicepays for itself in a matter of months.

A manufacturing company with 5,000 employees saw requests fornearly 300 transparency reports in just six months. In that time,their employees saved $88,200 and the employer $326,781. DirectPathfound employers with rewards programs receive an annual average of290 percent return on their investment.

When employees are tasked with being true health care consumers,it's important that their employers provide them with the support,programs and tools to make the most informed decisions.

When incentive and cash back programs are introduced, employeesbecome even more motivated to make decisions that save them money –and employers are seeing significant returns on theirinvestments.