In the driving seat

Barton Halling explains how to take a basic consumer-driven health (CDH) plan to the next level.

Taking your CDH strategy toward its potential has to start with really knowing where it is today. Did you come in with an initial strategy that was complex in design? If so, it's not necessarily too late to explore ways to simplify your plan offering whether it is a matter of adjusting the mechanics of your CDH options or maybe limiting some of those options until your population gains a better understanding of the program.

Did you set the foundation for consumerism through a strong, expansive education campaign? Helping members 'do the math' and understand the substantial personal impact behind pursuing and achieving improved health status is a powerful approach toward generating ground level CDH buy-in.

Do you understand the profile of your population as it relates to readiness for change?  Setting incremental, progressive CDH strategy depends on this base knowledge. After that, there is a myriad of paths to consider.

Firstly, there is a need to emphasizing preventive care. More than likely, you are already paying preventive care at, or close to, 100 percent. If not, you should consider doing so as preventive care can save you and your members significant dollars by heading off more serious health conditions before they can develop. A rich preventive care strategy can drive enrollment in health coaching and disease management programs. It can also help reduce anxiety from employees considering a 'high deductible' consumer plan option.

Secondly, it is a good idea to introduce a reward incentive for pursuing specific behaviors. Pre- and post-effective date incentives continue to play important roles in helping people move toward healthier decisions and improved financial wellness. Members need to have a reason, or better yet, several reasons to embrace consumerism, especially when it's offered as an option to a traditional PPO plan. Carrot vs. stick continues to be a perennial decision point when thinking through incentives. CDH strategies are no different in that respect. Incentives can be as simple as price and the positioning of employee premiums on the CDH option more favorably as it relates to other traditional plans. But traditional events tied to incentive rewards work effectively within CDH plan designs. For example, many plans include benefit dollar rewards for health risk assessment participation and even completion of employer-sponsored biometric testing.

Thirdly, rolling out reward programs for specific disease and chronic conditions can help. This innovative strategy is designed to motivate members to control their targeted chronic conditions in order to avoid incurring catastrophic claims later on. The idea is to provide special monetary funds to assist these members in pursuing and engaging in disease prevention education, coaching, wellness and lifestyle programs, and medical care for those managed conditions. To ensure compliance, the members shouldn't be allowed to carry these special targeted reward incentives over to the next year. This strategy helps alleviate the fear among plan sponsors and members alike of selective choice.

Finally, it is advisable to introduce an additional CDH plan option based on a different account type or with a different financial risk threshold. This strategy can be as basic as adding a health reimbursement account (HRA) to an existing flexible spending account (FSA) or introducing a health savings account (HSA) option to go along with an HRA. HSAs were not as popular as HRAs or FSAs initially, due to the immediate cash flow impact and risk they present in allowing full portability and the eventuality dollars leaving the plan upon employee termination.

Or it may be a matter of reconfiguring design strategies such as employer contributions or caps on rollover amounts. This practice can discourage savings over time since once a member meets a cap, there is no more incentive to continue to save. Much like a 401(k) retirement account, the long-term vision of growing assets and financial security from the risk of potential expensive healthcare events is what drives fiscally prudent consumer behavior in the first place.

Barton Halling is Vice President of product management for consumer driven and emerging markets for UMR, the third-party administrator (TPA) unit of UnitedHealthcare. Halling leads efforts to aggressively leverage the unique competitive position of UMR, with core functionality and capabilities at the convergence of the health and wealth industries.