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Chicago, Sept. 7, 2004 -
Nearly one in five companies (19 percent) of 314 firms surveyed
offer a consumer-driven health plan, up from 11 percent in
2003, according to Deloitte Consulting LLP, one of the nation's
leading professional services firms and a global leader in
human capital consulting. An additional 14 percent of companies
surveyed will definitely offer such a plan by 2006, while
another 29 percent are currently reviewing consumer-driven
health options and may offer one in the near future.
With more than half (53 percent) of surveyed companies reporting
health care cost increases in 2004 ranging from 11 to more
than 20 percent, employers are scrambling to adopt alternative
health care models that encourage employee consumerism to
help rein in costs without compromising benefits. Consumer-driven
health care models can vary considerably, but they share a
core principle: enabling employees to understand the true
cost of health care services and the options available to
them for receiving care while requiring employees to take
on increased financial responsibility for managing their health
care. "A double digit increase in the number of companies
offering a consumer-driven health plan clearly demonstrates
that these type of plans are rapidly gaining acceptance,"
says Steven Kraus, principal-in-charge of Deloitte Consulting's
Human Capital practice in Chicago. "With double-digit
annual cost increases, companies are reaching the limits of
their ability to fund traditional health insurance. Cost shifting
isn't working either. Executed properly, consumer-driven health
plans will transform care by rewarding employees, employers,
providers and payers for doing the right thing."
Health Care Savings
In general, early adopters of these plans have averaged a
drop in utilization of seven to 10 percent, according to Kraus,
but how that translates into savings differs widely by company.
Among the 19 percent of companies offering these plans, 15
percent expect to save more than 10 percent on health care
costs; 35 percent of early adopters say they will save more
than 5 percent; and 17 percent expect to save less than 5
percent. Another 29 percent of companies say the plan is cost-neutral,
while 4 percent say it will be more expensive.
Levels of Satisfaction
Early adopters report strong satisfaction among employees,
senior management and middle management. In fact, respondents
report 60 percent of employees in consumer-driven plans are
satisfied, 32 percent are neutral, and eight percent are dissatisfied.
A full 80 percent of senior managers are satisfied and 20
percent are neutral.
Among middle managers, 63 percent say they are satisfied,
33 percent are neutral, and four percent are dissatisfied.
Among those respondents that reported being dissatisfied,
the vast majority is only mildly dissatisfied.
Although roughly half of early adopters just launched their
consumer-driven health plans in January, 2004, early success
is leading some respondents to consider eliminating all other
forms of health coverage. "We're looking at possible
full replacement within two years. Our initial enrollment
goal was 30 percent. We doubled that the first year with 65
percent," according to a benefits manager for a mid-size
durable goods manufacturer.
Enrollment Rates
Enrollment rates overall vary. Among the 19 percent of respondents
with consumer-driven health plans, but excluding those whose
only coverage option is a consumer-driven plan, 12 percent
report that more than half their employees are enrolled in
the plan. Another 12 percent estimate between 31 and 50 percent
of their employees are enrolled in the plan, while 15 percent
of respondents report 21 percent to 30 percent have opted
for the consumer-driven plan. The remaining 62 percent of
respondents say 20 percent or fewer employees are in the consumer-driven
plan. However, 30 percent of early adopters are only piloting
the consumer-driven plan with a subset of employees. And no
respondents reported a decline in enrollment of these plans
from the previous year.
"Consumer-driven health plans confer important benefits,
including providing greater financial predictability for both
employers and employees," notes Kraus. "They marry
the best of managed care with greater accountability for all
concerned, from employees making health care purchases to
health care providers and payers that will increasingly be
judged on quality and efficiency."
About the Survey
Deloitte Consulting surveyed senior human resources executives
from 314 companies with median revenues of $1 billion and
an average of 5,000 employees. Respondents represented all
industries, with 33 percent in manufacturing and 14 percent
in financial services.
About Deloitte
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U.S. member firm of Deloitte Touche Tohmatsu, and services
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at www.deloitte.com/us.
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