Elements of Consumer-Driven Health Care

At its most basic level, consumer-driven health care is a variation of the oldest "insurance," which was designed to cover only catastrophic losses and to leave the burden of minor losses on the individual; and, when medical care is needed, selecting the best and lowest cost health care providers.

Consumer-driven health care plans come in various forms. Some simply consist of "tiered" network providers or tiered services. Others literally can permit the insured to design the entire plan, choosing the level of deductibles, copayments, and services covered. The premium is based on those choices. The employer contributes a stipulated dollar amount for the premium and the employee pays the remainder for the plan that he or she designed.

Most consumer-driven health care plans typically combine several of the following elements:

• a high deductible health insurance plan,
• a health account that can be carried over from year to year to cover minor health expenses and/or expenses not covered by the health "insurance,"
• free or very low-cost preventive care,
• information sources and tools both to educate the individual on health issues and to find the highest quality health care providers at the lowest cost,
• a conveniently accessible health "coach" or "consultant" to help plan participants obtain and use existing health information, answer questions about the individual's health issues, and provide guidance on use, choice, and interaction with health care providers, and
• in cases of serious chronic conditions or illnesses, a proactive medical professional who may contact the patient on a regular basis and act as liaison and coordinator among the patient and his or her medical providers.

To date, most consumer-driven health care plan participants are in employer-sponsored health benefit programs. The critical features of these plans are designed to educate employees as to the true cost of medical services and their role in managing health care spending. The plans use innovative plan design with built-in incentives to give the employee freedom in medical purchasing decisions and hold the employee more financially responsible for those decisions. But, importantly, these plans provide clinical and financial information enabling employees to be true health care consumers and to shop for the best "deal." Most also provide proactive clinical management and coaching to optimize provider efficiencies and courses of treatment.

As health care consumers become financially responsible for more of the real cost of health care services and receive more information on treatments available, outcomes, and the quality of the health care provider, proponents of consumer-driven health care plans believe these plans will motivate employees to purchase more efficient and effective health care. This motivation will then reduce both demand and long-term health expense.