Rethinking Health Care

Can more employee choice actually lower costs?

EnPro is taking the idea of tailoring one step further. “We already pay 100 percent of an annual physical and have disease-management and wellness programs,” Spradling says. “In 2008, we want to expand some of these programs on-site. We’re looking at what types of programs may best suit an individual who, say, lives in Deloitte, Wisconsin, [versus] an employee in Houston. For example, we may have a higher incidence of diabetes in one location, so we may put a stronger emphasis on diabetes education there.”

Data Dilemma

While health-care consultants generally agree that giving employees greater control over spending should drive down costs, they also agree that won’t happen without access to reliable quality-of-care data. For competitive reasons, however, plan administrators are loathe to disclose their financial arrangements with health-care providers. And many providers shy away from reporting quality data, concerned that there are too many underlying variables to make comparisons.

Fortunately, headway is being made. Not-for-profit organizations such as the National Quality Forum, The Leapfrog Group, and Bridges to Excellence have all developed metrics for assessing quality. The simplest metrics, says Leapfrog Group acting CEO Karen Linscott, are procedural: for example, does the provider follow accepted best-practice procedures, such as administering beta blockers after a heart attack? Next in value are structural metrics: Does the provider have adequate staffing? Finally, there are outcome-based metrics: How do a hospital’s infection and morbidity rates compare with its peers’? “Outcome metrics are the gold standard, but there aren’t many of them,” Linscott laments.

In addition to the work being done by not-for-profit organizations, some plans have started to identify subsets of higher-quality providers. But Nussbaum cautions that the exercise may need to be more rigorous. Right now, he says, some higher-performing networks include two-thirds of a plan’s physicians, calling into question just how well they separate the wheat from the chaff. One problem: health plans are torn by the conflicting desire of participants and employers to be able to choose from many providers and the obvious benefit of including only top performers in networks.

Despite such caveats, one benefit Chesapeake Energy saw in moving to Blue Cross and Blue Shield of Oklahoma was its ability to pool claims data with others in the national Blue Cross Blue Shield Association. Specifically, Blue Cross allows participants to see data on providers across the nation in order to make educated choices.

The Downside of Empowerment

To be sure, the trend toward giving employees more control over health care runs risks. “To me, the real danger is that we lack the information required for consumers to behave in the way we hope they would,” D’Andrea says. And John Asencio, senior vice president of Sibson Consulting, speculates that that is one reason why CDHPs have “not taken off.”

D’Andrea also concedes that workers responsible for more of the first-dollar spend on health care might be tempted to seek care less aggressively. “That is the danger, but in some ways that’s also the point of these plans — to ask employees to make that cost/benefit analysis,” he says. The HealthPartners study, however, does indicate that employees did not avoid care but instead got preventive services.

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