Moving from a traditional health benefit plan with co-payments or low deductibles to a consumer-driven health plan (CDHP) is a significant benefit change. You only have the opportunity to prepare for it once.
The decision to make significant benefit changes should be like any business decision: it should be made after thoughtful analysis and with specific objectives in mind.
Where do companies fall short in this process?
How can you avoid a failed strategy?
Following are some tips to consider as a company proceeds down this path. If you have the responsibility for the recommendation and/or decision, you want to be certain that you maximize your chances of success.
There are many reasons for a company to move to a CDHP. At the top of the list is better management of increasing health care costs. In order to understand how to define “better management,” you should review your premium/claim funding increases over the past three years. What have those increases (or decreases) been and what has impacted them? Only by looking back historically can you understand what projections should be going forward.
Tools for your employees
When employees have a high deductible, they will start to ask what services will cost them. They will be interested in information on quality. This information is often difficult to find. But, the information is absolutely essential to help employees and their families become better healthcare consumers. Research shows that employees who receive cost and quality information before a procedure or test choose the lower-cost provider over 40 percent of the time. Employees can be engaged – but as the employer, you need to provide the tools.
Are your employees listening?
A major key to CDHP success is a robust communication plan. You cannot be successful without it. The plan should include electronic and hard copy materials. Launch the campaign at least six months before implementation of a CDHP. Use materials that are written at a sixth grade level with pictures and graphics. Employee meetings to explain the new program and benefits are recommended – make them mandatory.
Explain the big picture
No one wants to see their deductible increase from $500 per year to over $1,000 per year. No one really wants to hassle with setting up a health savings account. So, as the employer, you need to explain the business case to your employees. Why are you doing this? What impact do their individual healthcare costs have on the company’s total costs and profitability? Explain to employees that when your company pays more in health care costs, there is less money available for salary increases and other things.
If your company is considering a CDHP, there are several steps that you can take to increase the likelihood of success with this strategy. They are as follows:
What impact do you expect this program to have on your health care trend? Successful CDHP clients work with their benefit consultant to understand what will impact trend and how to insert quarterly data points to measure.
Create a significant financial incentive for employees to choose the high deductible plan. Employees understand that they will pay more at time of service with a high-deductible plan, so there has to be a reason for them to select that option. Give them that reason by creating a large premium incentive to do so.
Communicate clearly and often
It is always easier not to change, particularly if the choice that represents change has not been clearly explained. In order for your employees and their families to use a CDHP successfully, they have to understand it. Develop simple communication pieces and distribute them on a monthly basis beginning at least six months prior to the effective date of your CDHP.
HSA banking arrangements
The bank that is administering the HSA plan for your employees should have clearly written, readily available materials on how to set up the HSA account.
Provide employees with specific and relevant cost and quality information. In order for your CDHP to produce results, your employees need to become better healthcare purchasers. They need to understand cost and quality information and make pro-active choices based on that information.
Headquartered in Milwaukee, Patient Care is the nation’s leading advocacy company and helps employees navigate the healthcare system and become better healthcare consumers. For more information, visit www.patientcare4u.com.