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The Truven Health Blog


The latest healthcare topics from a trusted, proven, and unbiased source.


Implementing a Successful Consumer-Directed Health Plan


By Emily Kelly/Monday, June 29, 2015

Consumer Directed Health Plans (CDHPs) are quickly becoming a popular benefit option for U.S. employers. These high-deductible plans are one of the fastest-growing benefit options for employees. To explore their effectiveness, we conducted a study using the MarketScan® Commercial Claims Database. The study closely matched members enrolled in a CDHP to members continuously enrolled in a non-CDHP, and evaluated healthcare costs and utilization over three years. We found a direct link between CDHPs and lower healthcare costs. On average, CDHP enrollees incurred $457–$532 less per member per year.

But these savings might come with consequences. Utilization rates were lower among CDHPs for a wide range of services — including professional visits, lab services, non-maternity admissions, and prescription drugs — suggesting that consumers may be reducing utilization across the board as opposed to simply avoiding unnecessary care. Of particular concern, members enrolled in CDHPs were less likely to receive any medical care for their existing chronic conditions than were their non-CDHP counterparts (based on a review of eight common conditions asthma, congestive heart failure, coronary artery disease, depression, diabetes, hypertension, low back disorders, and osteoarthritis).

Although the benefits of CDHPs are substantial, these arrangements need to be entered into carefully. It is important to recognize that a CDHP design could result in members not receiving recommended care — and that could lead to higher costs in the future. If your company currently offers or is contemplating a CDHP, we suggest that you consider the following:

  • Educate enrollees so they fully understand and take advantage of their benefits, specifically benefits of covered preventive services.
  • Engage CDHP members to ensure they are continuing to manage chronic conditions while enrolled in a CDHP. The study suggested CDHP members received less care for current chronic conditions and were less likely to be diagnosed with new chronic conditions.
  • Recognize that each employee is unique, so a CDHP might not be the best choice for all members. Help individuals choose the right plan based on their current health and their healthcare plan history.
  • Provide useful tools, such as cost calculators, to make it easier for members to access information on physician cost and quality. 

For the full study on the impact of CDHPs on cost, utilization and care, click here


Consumer Engagement Grows as CDHPs Gain Popularity


By Chris Justice/Wednesday, October 8, 2014

Consumer-Driven Health Plans (CDHPs) are one of the fastest growing benefit options offered to employees – and soon may become the dominant plan type. In fact, a recent Kaiser/HRET survey found that CDHP enrollment has gone from just 4 percent of all employees who were given that option in 2006 to 20 percent in 2013. 

In order to ensure CDHP members can effectively engage in their healthcare, employers must provide participants with timely access to consumer information tools to help them understand the range and cost of treatments available through plan providers and also information about provider quality. In the absence of this kind of help, CDHP participants are faced with a daunting task to make effective care decisions.

In addition to employees becoming more educated about their own healthcare, the companies they work for are offering new options that provide incentives and potential savings for the enrollees, as well as the employer itself. As part of a recent survey of Truven Health MarketScan™ data contributors, 64 percent of companies stated that they currently offer one or more CDHP options, and 76 percent stated that they will offer one or more in the future. The majority of these options consist of CDHP or high-deductible health plan (HDHP) with a health savings account (HSA) feature. 

This type of growth is leading to a new paradigm in which more patients are taking on a greater role in treatment decision-making. For instance, under a traditional PPO plan in the past, it was very likely that a breast cancer diagnosis would result in a set course of action. However under a well constructed CDHP, the patient can make assessments based on the price she is willing or able to pay, the quality of treatment and providers, and even the best locations to receive the necessary treatment. With the help of her doctors and advisors, she can decide what’s best for her. She is engaged in her own plan for her health and treatment. 

As this substantial shift continues, employers have the ability to empower their employees by providing the opportunity for them to be engaged in their own healthcare decisions, leading to cost-savings for the employee — and the organization.   

To learn more about achieving year-round engagement with your employees, please access this complimentary insights brief from Truven Health Analytics.

Chris Justice
Senior Director of Practice Leadership


Large Employers Continue to Manage Their Healthcare Spend


By Michael L. Taylor/Tuesday, September 2, 2014
Mike Taylor imageA recent survey published by the National Business Group on Health (NBGH) found large employers haven’t stopped trying new ideas to control their healthcare spend. Various consulting firms have predicted anywhere from a 4% to 9% healthcare cost increase for 2014, with a sharper uptick in 2015, so these strategies are very important. The medical spend trend in the past several years has been more moderate due to a combination of lingering effects from the recession and payment reform. What strategies will employers use to control costs in the future? Here is a partial list (in no particular order):
  • Employers will continue to implement higher co-pays and deductibles. This has been occurring for 20 years with the employer typically paying 70-80% of the cost and employees picking up the rest.
  • The use of high-deductible health plans (HDHP) will continue to grow, with deductibles above $1000. HDHP include the full cost of all prescriptions as part of the deductible, and employers expect that strategy to drive more transparency around drug costs and a higher demand for generics.
  • Employers will more carefully consider the use of spousal surcharges. The logic is that if a spouse has other coverage because they work at another employer, the spouse should take that coverage. Spousal surcharges run more than $100 per month, and are intended to incent the spouse to seek other coverage.
  • Large employers haven’t given up on wellness programs. We will see continued interest in financial incentives to change behavior, with a minority of employers incenting outcomes such as weight loss, tobacco cessation and physical activity.
  • Many employers haven’t found value in disease management programs and are looking into other ways to help employees better utilize healthcare services. The future of disease management programs is unclear, but providers are working hard to target these programs to patients who are most likely to benefit.
  • “Specialty drugs” or “biologics” are a growing cost issue. As has been reported by many, the new Hepatitis drug costs $84,000 for a 12 week treatment. Specialty drugs consume roughly 25% of the drug spend, but are projected to rise to nearly 50% in the coming years. Employers will likely use step therapy and prior authorization programs to manage these costs.
  • Interest in narrow networks will continue to grow, including incentives to receive care at distant medical centers and “Centers of Excellence.” Large employers with many employees at one location are studying the feasibility of contracting with only a few hospitals by offering the hospitals a larger volume in return for a lower unit price. I believe this will be limited to certain procedures (cardiac bypass, hip and knee replacement) rather than full alliances.
  • Employers will continue to drive “pay for value, not volume” payment reform. This is a newer trend, but I believe it will grow substantially in the next several years. Employers want to know they are buying high quality healthcare, and not paying for wasteful unnecessary care.
  • Employers are still considering more transparency tools to help their employees understand cost, but many employers are looking to their health plans to provide these tools.
  • Most employers have shifted their retiree benefit plans (especially for the pre-65 retirees) to an exchange, rather than allowing the retirees to remain on their traditional plans.
  • Some employers are looking to public or private exchanges. These conversations are less likely to be occurring for those who employ large numbers of knowledge workers; most of this activity will likely take place among companies that employ low-margin service employers.
Our clients are studying many options. There is no single clear strategy; every employer has a different culture, and a unique approach to managing costs. These choices are difficult for employers to evaluate, because there are so many variables and confounders that it’s difficult to know what parts of the strategy are actually working. Employers are depending more and more on data and analysis to understand all these moving parts. The one constant among all the variables will be the need for data and thoughtful analysis.

Michael L. Taylor, MD, FACP
Chief Medical Officer

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