Pin the Tail on the Doctor

Employer Options
Because transparency in health-care data is such a new concept, some employers are waiting before they move to a consumer-driven plan. That's the case at United Parcel Service of America (UPS), says health and productivity manager Randall Price. "It's not that we don't believe they have a future. But we don't have the data that's central if people are to make the most effective health-care decisions." Given that UPS employs around 427,700 people worldwide, both breadth and depth of data are key. For now, says Price, UPS plans to maintain its indemnity, PCP, and PPO-type plans.

Other employers are making the switch. Harrah's Entertainment Inc. is tackling health care on several fronts. First, the company will operate in-house clinics covering about 70 percent of Harrah's workforce, requiring just a $10 co-payment. The goal is to halt a trend seen over the past few years, in which some employees skimped on preventive care in order to avoid out-of-pocket costs, says Jeff Shovlin, vice president of benefits.

At the same time, the company will replace its traditional PPO medical-insurance plan with a consumer-directed plan using a health-reimbursement account. Enrolled employees will receive $500 ($1,000 for those with family coverage) as a credit to these accounts to pay for nonpreventive care. (Preventive care is covered.) Once the account is depleted, the employee must first pay a deductible, which can vary from $250 to $1,000 for an individual, and $750 to $1,500 for a family. After that, the company picks up the costs.

Harrah's is working with Cigna to offer quality and efficiency information on health-care providers via the Web. Finally, management is helping employees understand the change in cash flow under the new plans, says Shovlin. "With a consumer-driven plan," he says, "you can be lulled into complacency. But once the account is gone, you're on the hook for $500 to $1,500."

A Federal Case
The federal government is making more information available to enrollees in its health-care plans. An executive order issued in August directs federal agencies to provide enrollees in their health-care programs with information on the price and quality of services offered by health-care providers.

Because the U.S. government oversees health care for some 93 million individuals, or 40 percent of the insured population, this change will probably affect individuals covered through private-sector health plans. HHS's Leavitt is asking employers to consider what he calls "the cornerstones of value-driven health care" as they negotiate with insurers. These include interoperable information systems and transparent price and quality data. Employers have responded positively, says Leavitt, who estimates that 60 percent of the 200 largest health-care payers will include these issues in their requests for proposals for the 2008 plan year.

According to The Segal Co., the expansion of programs that share insurers' cost and quality data is critical to the growth of consumer-driven plans. "The true turning point will come with the creation of a neutral third-party agency that helps employees understand and navigate the system," says Segal's Calvert.

The $64,000 Question
As health-care information becomes more accessible, will employees use it to purchase health-care services more intelligently? A 2004 report from the Institute of Medicine states that 90 million people, or nearly half the U.S. adult population, have difficulty understanding and acting on health information.

Employers need to provide assistance. General Electric offers its employees a nurse call-in line to help talk them through health-care decisions, says chief medical officer Robert Galvin, M.D. The nurse records information on the employee's condition, reviews treatment options, and offers quality data. For example, he or she might tell a patient facing back surgery how many similar surgeries have been performed at each local hospital.

Although UPS is maintaining its traditional insurance plans, it did introduce a nurse coaching program in 2006 for individuals at risk for certain chronic conditions, and it is partnering with Aetna this year to provide electronic personal health records for more than 280,000 employees and retirees, plus their eligible covered dependents. Employees can track and manage their health care using a secure online tool that automatically displays claims-based health information such as medicines, lab records, tests, and procedures. They can also input additional medications, and then share all of the information with their physicians.

Nussbaum of Watson Wyatt recommends taking 12 to 18 months to switch to a consumer-driven plan. Employees need to get comfortable evaluating information and options, he says, and providing a greater level of input into their courses of treatment.

Anecdotal evidence suggests that consumers become more comfortable using information over time. Visits to www.mycigna.com's cost and quality information pages jumped from about 1,500 per month in 2005 to between 6,000 and 10,000 per month in 2006, says Jim Nastri, Cigna's vice president of new-product development and cost and quality transparency.

Since about 2001, General Electric has been sending employees E-mails with quality measures for different health-care providers. Early surveys and focus groups revealed that initially employees didn't believe that significant differences in quality existed, says CMO Galvin. They questioned the source of the information and the motives behind the E-mails. "At first they thought we just wanted to save money," he says.

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