Healthcare: Where Next?

HRM gathers CIGNA’s Bill Riendl, HSA Bank’s Kirk Hoewisch and Wells Fargo’s José Becquer to discuss industry developments and gauge the potential impact of the economic downturn.

“We are engaging the individuals in the ways they prefer to be communicated to and in a method that focuses on the 'voice of the customer'”
-Bill Reindl, CIGNA

HRM. Would you agree that healthcare is moving from a traditional reactive model to something more proactive and preventative? What impact is this having on providers and employers?
Bill Reindl. Healthcare is clearly moving to be more proactive and preventive, which are at the center of CIGNA’s strategy to become a leading health services organization.

Through our technology investments and proprietary work with the University of Michigan, we are able to identify up to 83% of future health risks as early as two years in advance of a significant medical event – even if the individual feels fine today. We are investing in early intervention, gaps in care, preference sensitive care and sophisticated telephone and electronic outreach.

We are engaging the individuals in the ways they prefer to be communicated to and in a method that focuses on the “voice of the customer,” all designed to improve their health, personal security and wellbeing.

Kirk Hoewisch. We are seeing a gradual shift to more proactive and preventative healthcare. In our HSA Benchmark survey conducted in April 2008, evidence showed a majority 57.6% of respondents receive annual physical exams. Additionally, people with an HDHP were more likely than those without an HDHP to ask about the cost prior to making an appointment (26.2% vs. 16.1%), ask about lower cost alternatives (32.9% vs. 25.2%), and ask about generic prescription alternatives (79.5% vs. 70.7%). As this new, more cost-conscious consumer evolves, providers and employers must take a closer look at price transparency and wellness programs. True price transparency allows consumers to view cost and quality information for healthcare. Sites, such as carol.com and other national health plan carriers, are starting to make this a reality, at least in some areas of the country. Wellness programs also play a key role in incentivizing and educating consumers on the benefits to healthier lifestyles. The most successful wellness programs tie results with incentives, rather than only participation.

José Becquer. We see HSAs as an important first step in evolving to a more proactive and preventative approach. With HSAs people have an incentive to be more engaged in their healthcare and spending decisions because they have the control. It’s their money. This certainly has an impact on providers and employers and it’s forcing many to move out of their comfort zones. People want to know about their options and costs and that means physicians are having more in-depth conversations with their patients. With the newness of these programs, employers have to provide more communications to help explain what’s available to their employees.

HRM. We currently face a period of prolonged economic uncertainty. Do you feel that the credit crunch will have any impact on business’ approach to employee healthcare and wellness?
KH. The current economic conditions are making employers more aware than ever of the cost of healthcare. While some employers may consider dropping coverage, most are looking for lower-cost alternatives. A high deductible health plan with an HSA provides a successful alternative. According to the 2008 Kaiser Employer Benefit Survey, enrollment in HDHP plans increased from 5% in 2007 to 8% in 2008. The report also indicated that high deductible health plan premiums are averaging 16.6% less for individual policies and 20.2% less for family policies than the average premiums of all other health plans. Along with this shift towards HDHPs, employers are looking to make their employees more accountable for their health. Wellness programs range in complexity and, at first glance, can appear to add unnecessary expense. However, recent statistics show that they can have a three-to-one annual ROI. These statistics will help strengthen employer’s decisions to implement wellness programs and realize immediate savings.

JB. As long as employers bear the bulk of their employees’ health costs, they will continue to look for ways to lessen and mitigate those costs. They want to find the best value for their limited dollars. Consumer driven healthcare and HSAs are a way to do just that. These are tough economic times, and with all the uncertainty in the market it’s even more important to work with a trusted financial institution in choosing an HSA provider. Employees need to feel comfortable that their HSA balance is safe with FDIC insured deposits, especially to meet their daily medical needs, along with other good investment options. (Investments are not FDIC insured, may lose value and are not bank guaranteed.) Now more than ever it’s important to understand how diversified your HSA options are and to work with someone you trust.

BR. Economic uncertainty always drives employers to look for alternative ways to manage costs. Properly designed consumer directed plans are a proven way to reduce overall costs on a multi-year basis without cost shifting to employees.

Medical cost trends for CIGNA CDH plans are 30 to 50% less than comparable HMO and PPOs, and these savings compound over time, as documented by our multi-year CDH studies. Most importantly, these costs are reduced without reducing quality or care.

HRM. If an organization is planning to take on an external healthcare provider, what are the most important features it should be looking for in potential partners?
JB. Remember you have choices. When an organization is looking for an HSA provider they might be tempted to go with the product the healthcare provider recommends, but an independent product might be better for your company and your employees in the long run. Most employers change health insurance carriers every three to five years. That’s a communication challenge all its own. And as your employees’ balances grow, they will be less inclined to want to make a change. So it’s important to find an HSA administrator who is flexible and can work with multiple carrier partners and changing employer needs. You also want someone who will make it easy for you and your employees to set up accounts and provide ongoing account management solutions. Look for an administrator who is constantly developing new tools and upgrading services to deliver an even better experience to you, their client.  

BR. Two vital features organizations should look for are integrated health plan programs that demonstrably improve costs without sacrificing care, and an effective CDH plan design that is benefit-neutral (to the individual vs. their current plan) and includes a properly funded account (HRA or HSA) that delivers a true value proposition to employees. Too many CDH plans look good on paper but receive little enrolment and therefore, no savings.

KH. Health plan providers offer many different options and alternatives. Based on an employer’s situation, the needs are going to vary. Typically smaller employers are looking for comprehensive coverage, controlled premium increases and low ongoing administrative costs. In these cases, it is beneficial to have a provider that offers various qualifying high deductible health plans which range from low-end deductibles to high-end deductibles. For larger employers, integration tends to become more important. A seamless enrollment experience between the health plan and other vendors such as the HSA administrator can facilitate a more positive experience for employees. Integration points may also include contributions, claims payment, single online access and one source customer service.

HRM. How is technology impacting the design and management of healthcare programs? What innovations do you foresee in the coming months and years?
BR. During the past several years there’s been a virtual “arms race” of technology development making healthcare quality and costs more transparent for the individual, to make healthcare more accessible and proactive and to improve health plan transactions for physicians and employers.

For example, next generation technology ties online transparency and healthcare information tools together in a comprehensive, consumer-friendly, physician, hospital and care decision support capability, by integrating health information, quality information, cost of care and questions to ask a doctor using simple, symptom-based searches.

To make care more accessible we’re introducing online doctor visits as a convenient and cost effective alternative to an office visit. To be more proactive, we’ve linked our online health risk assessments to online wellness programs, our health advisors and health advocacy programs. We are also engaged in a multi-year launch of a comprehensive solution designed to simplify and improve the patient payment process, processing costs and reduce the risk of patient bad debt. Using a new system, both patient and physician will know the patient’s estimated costs upfront and have access to an auto-claim payment process that taps into funds of the individual’s plan, including insurance coverage so the physician does not have to separately bill the patient. In addition to our current auto-claim payment process, the new system will incorporate a credit feature.

KH. Technology is affecting many aspects of healthcare programs. Two key areas include the payment structure and wellness benefits. Payment structures are changing rapidly with the addition of benefits cards that manage payment from multiple accounts, direct payment to providers and online claims authorizations. Over the next few years, this will continue to evolve as health plans and providers work towards point-of-sale re-pricing to require instant payment of services.

Wellness programs and behavior-based pricing are growing as they become easier to facilitate. Some employers are taking wellness to the next step by incorporating biometrics testing. With this, a registered nurse administers a small test, including collecting a blood sample. Then, a personalized health report is created and employees are then given incentives, typically monetary, to improve their metrics over the next year. The key to these programs is progress and it doesn’t matter where a person starts. Employers also can point to quantitative results when justifying the costs of these programs.

JB. At Wells Fargo, technology and innovation have always been very important, and with our HSA program it’s no different. We want to serve our customers when, where and how they want. Oftentimes, that includes being easily accessible online 24 hours a day. We see technology enabling greater levels of transparency for transactions and information on both cost and quality of care. For employees with HSAs, online access to manage their accounts is important, along with easy access to funds, greater level of customer service and advocacy for consumers. For employers administering these programs, simplicity and ease are key and technology will help them with greater efficiency. Paperless enrollment, online account setup and implementation and a simple secure way to transfer and reconcile HSA contributions are all important and promote ease and more accessibility. Which brings us back to healthcare moving towards a more proactive and preventative model. When the employer and individual have more visibility and more access, it makes everything easier. As we continue to move forward, these systems will only become more refined.

About the Contributors

Bill Reindl has been at the forefront of the consumer health care movement since it began and is considered one of its thought leaders. As CIGNA Senior Vice President, Consumer Segment, he is responsible for driving CIGNA's consumer strategy throughout its middle market and small business segments.

Kirk Hoewisch began HSA Bank’s initiative to offer Medical Savings Accounts (the predecessor to Health Savings Accounts) on a national scale in 1997. He was named President of HSA Bank in 2005 where his dedication to the strategic development and management of the organization yielded the industry’s most comprehensive HSA product.

José Becquer is an executive vice president and group head of Wells Fargo Health Benefit Services (HBS), which specializes in the administration of Health Savings Accounts (HSAs) for companies nationwide. Based in Minneapolis, he manages a nationwide team of over 300 sales, service and marketing professionals.