Tailor-Made
Another type of segmentation may be more palatable. Tailoring health-benefit programs to the health segment that employees and their families belong to — a concept that consulting firm Watson Wyatt Worldwide calls targeted consumerism — could reduce costs. "It's a targeted approach to looking at how employee populations use health-care services," says Watson Wyatt's Ted Nussbaum. "Five percent of the population drives 50 percent of the costs, and 70 percent drives 10 percent. We look at what proportion of the population falls into various segments to help employers decide what to emphasize. For younger, healthier employees, you target health-improvement programs — diet, exercise, weight loss. At the other extreme, you have disease-management or health-management programs that can keep people with acute conditions stable or improve their health."

Lafond says that when Gartner decided to offer an HSA to its employees this year, alongside its traditional PPO and HMO offerings, one of the attractions was that it would likely appeal to younger employees, who are less likely to be confronting major medical expenses but nonetheless cannot afford to forgo insurance.

In addition to three types of insurance plans for its U.S. employees, for example, Gartner also offers the Gartner Employee Assistance Program in the United States and Canada. Through a third-party provider, associates are given access to counseling on a wide range of issues, including family concerns and substance abuse. Features include unlimited, 24-hour-a-day access to a telephone hotline and three live visits with a counselor annually. "I can't really say what cost benefit this has provided," Lafond says, "but we hope that providing an avenue to deal with issues early can impact costs longer term."

EnPro is taking the idea of tailoring one step further. "We already pay 100 percent of an annual physical and have disease-management and wellness programs," Spradling says. "In 2008, we want to expand some of these programs on-site. We're looking at what types of programs may best suit an individual who, say, lives in Deloitte, Wisconsin, [versus] an employee in Houston. For example, we may have a higher incidence of diabetes in one location, so we may put a stronger emphasis on diabetes education there."

Data Dilemma
While health-care consultants generally agree that giving employees greater control over spending should drive down costs, they also agree that won't happen without access to reliable quality-of-care data. For competitive reasons, however, plan administrators are loathe to disclose their financial arrangements with health-care providers. And many providers shy away from reporting quality data, concerned that there are too many underlying variables to make comparisons.

Fortunately, headway is being made. Not-for-profit organizations such as the National Quality Forum, The Leapfrog Group, and Bridges to Excellence have all developed metrics for assessing quality. The simplest metrics, says Leapfrog Group acting CEO Karen Linscott, are procedural: for example, does the provider follow accepted best-practice procedures, such as administering beta blockers after a heart attack? Next in value are structural metrics: Does the provider have adequate staffing? Finally, there are outcome-based metrics: How do a hospital's infection and morbidity rates compare with its peers'? "Outcome metrics are the gold standard, but there aren't many of them," Linscott laments.

In addition to the work being done by not-for-profit organizations, some plans have started to identify subsets of higher-quality providers. But Nussbaum cautions that the exercise may need to be more rigorous. Right now, he says, some higher-performing networks include two-thirds of a plan's physicians, calling into question just how well they separate the wheat from the chaff. One problem: health plans are torn by the conflicting desire of participants and employers to be able to choose from many providers and the obvious benefit of including only top performers in networks.

Despite such caveats, one benefit Chesapeake Energy saw in moving to Blue Cross and Blue Shield of Oklahoma was its ability to pool claims data with others in the national Blue Cross Blue Shield Association. Specifically, Blue Cross allows participants to see data on providers across the nation in order to make educated choices.

The Downside of Empowerment

To be sure, the trend toward giving employees more control over health care runs risks. "To me, the real danger is that we lack the information required for consumers to behave in the way we hope they would," D'Andrea says. And John Asencio, senior vice president of Sibson Consulting, speculates that that is one reason why CDHPs have "not taken off."

D'Andrea also concedes that workers responsible for more of the first-dollar spend on health care might be tempted to seek care less aggressively. "That is the danger, but in some ways that's also the point of these plans — to ask employees to make that cost/benefit analysis," he says. The HealthPartners study, however, does indicate that employees did not avoid care but instead got preventive services.

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