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Understanding the Consumer Directed Healthcare Movement

Consumer Directed Healthcare PREMISE: If consumers are made more accountable for the cost of their healthcare, they will become more responsible healthcare consumers - and overall healthcare costs will decrease. RISING HEALTHCARE COSTS HEALTH INSURANCE PREMIUMS 117% t WAGES 52% t 1998 2013 Health insurance premiums have outpaced wages and inflation every year since 1998. The average cost of medical and pharmacy coverage is U.S. employers spend more than $1.6 trillion $11,204 per year on employee benefits for over per employee, per year. 149 million people ENTER: CONSUMER DIRECTED HEALTHCARE (CDH) In 2012, 73% of 66% of employers employers increased increased employees' employees' contributions share on plans with dependent for single-only coverage. coverage. High deductible health plan Employers are increasingly adopting high deductible plan designs to lower Deductible > $1,000 their own costs. High deductible health plan CDH accounts allow consumers and employers to save pre-tax funds to cover eligible healthcare expenses: Tax advantaged spending account Health savings Flexible spending Health reimbursement accounts accounts arrangements A consumer HSA FSA HRA directed health plan (CDHP) INCREASED ADOPTION OF CDH PLANS AND ACCOUNTS... 25 million+ people are enrolled in CDHPS. HSA 31% of the U.S. workforce is enrolled in high-deductible health plans. HSA FSA FSA CDH accounts are gaining popularity: 2010 2015 HRA HRA 28.7 61.6 million accounts million accounts 2010 2015 The percentage of firms offering only CDHP has grown steadily. This is leading to increased consumer out of pocket healthcare spending: 4.2% CAGR $280B $405B 14% 5% 8% 2007 2012 2013 2008 2017 LEADS TO MORE COST-CONSCIOUS HEALTHCARE CONSUMPTIO... Relative to those enrolled in traditional coverage, CDHP participants are: CDHPS lead to a 25% more likely to... 29% more likely to.. 25% more likely to... ask for a generic drug instead of a brand-name drug. check whether talk to their doctor their plan would about treatment 5-14% reduction cover care. options and costs. 62% more likely to.. 39% more likely to. 109% more likely to. check the price of in healthcare use online cost tracking tools provided by their health plan. develop a budget to manage healthcare spending vs. traditional service before expenses. getting care. coverage. ..AND HIGHER DEGREES OF OVERALL HEALTHCARE ENGAGEMENT Relative to those enrolled in traditional coverage, CDHP participants are: B+ 15% more likely to... 48% more likely to... 34% more likely to... 35% more likely to... check quality rating of doctor/hospital. participate in a health risk participate in a health promotion participate in biometric assessment. program. screening. AAlegeus SOURCES: EBRIIMGA survey (2012), Princeton Review (2012), Towers Watson (2012) TECHNOLOGIES PREMIUMS DEDUCTIBLES 16.5% CAGR

Understanding the Consumer Directed Healthcare Movement

shared by Alegeus on Jan 13
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If consumers are made more accountable for the cost of their healthcare, they will become more responsible healthcare consumers - and overall healthcare costs will decrease.

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