Survey: Consumer-Driven Health Plan Cost Growth Significantly Slower Than Other Plans
Posted on: Tuesday, 24 January 2006, 12:00 CST
WASHINGTON, Jan. 24 /PRNewswire/ -- The cost of health plans that encourage members to be better health care consumers grew at a significantly slower rate in 2005 than other types of plans, U.S. employers reported in a survey released today by the Deloitte Center for Health Solutions.
The cost of consumer-driven health plans -- such as health savings accounts or health reimbursement arrangements -- increased by an average of 2.8 percent from 2004 to 2005, according to the survey of 152 major U.S. employers. That compares to an 8 percent increase in total premiums for health maintenance organizations, an 8.5 percent increase for point-of-service plans and a 7.2 percent increase for preferred provider organizations. Traditional or indemnity plan costs increased 6.4 percent last year, according to the survey. The average for all types of plans was 7.3 percent.
"Employers are increasingly turning to consumer-driven health plans to reduce costs and help workers and their families make better health care decisions," said Tommy G. Thompson, the independent chairman of the Deloitte Center for Health Solutions. "Not only do companies protect their bottom lines, they help make employees better health consumers."
The survey also found that businesses are projecting similar rates of cost growth in 2006, including 2.6 percent for consumer-driven health plans, 7.4 percent for health maintenance organizations, 7.3 percent for point-of-service plans, 7.5 percent for preferred provider organizations, and 6.6 percent for traditional or indemnity plans. The average for all types of plans is projected to be 7.1 percent.
Not surprisingly, 40 percent employers said consumer-driven health plans offer "the most effective approach for managing costs and maintaining quality care," while 35 percent said preferred provider organizations were the most effective. Eighteen percent selected health maintenance organizations, 6 percent said point-of-service plans, and just 1 percent said traditional or indemnity plans.
Consumer-driven health plans combine discounts inherent in managed care programs with incentives to encourage members to become better consumers of health care. Typically, these plans are designed using accounts -- tax-advantaged health savings accounts or health reimbursement arrangements -- that often include some level of employer contribution, in combination with front end deductibles. They also provide the member with tools that provide clinical, cost and quality information so they can make personal health decisions that best meet their needs.
"They encourage employees to become consumers of health care and provide them with the tools necessary to understand how to work with their physicians to get the right care, in the right setting, at the right time," said Barbara Gniewek, principal and health care industry leader of Deloitte's Human Capital practice.
The survey, held in conjunction with Deloitte Consulting LLP's Human Capital practice and co-sponsored by The ERISA Industry Committee, was conducted over four weeks in December and early January. Results were presented by Secretary Thompson at the 2006 Health & Human Capital Management Congress on Tuesday.
"In addition to cost savings, consumer-directed health plans can offer employees an additional tool to save money tax free for retiree health," said Edwina Rogers, Vice President Health Policy for The ERISA Industry Committee. "Further, many of our members are aggressively working to supply their employees with quality and efficiency information on health care providers."
A Deloitte study released in November found that 43 percent of U.S. companies either have a consumer-driven health plan in place (22 percent) or will be offering one in the next two years (21 percent). Another 51 percent said they are reviewing consumer-driven options and may offer one in the near future if they can be proven to be attractive to employees while saving money.
Deloitte Center for Health Solutions
CONTACT: Tony Jewell, Director, National Public Relations of DeloitteServices LP, +1-202-220-2772, tjewell@deloitte.com
Web site: http://www.deloitte.com/us
Source: PRNewswire
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