Consumer Directed Health Care Saves $
Recently Watson Wyatt released a report of characteristics of companies with very low health insurance cost increases – about 1 percent a year. The average company experienced an increase six times as great. Poor performing companies had an increase ten times greater.
The report’s major findings:
“Best-performing companies have a two-year median cost increase of 1 percent, compared with 10 percent for their poor-performing peers. The median two-year increase for all employers is 6.2 percent.
Companies with a CDHP report a two-year average cost trend that is significantly below that of companies without a CDHP (5.5 percent vs. 7.0 percent). Enrollment rates in CDHPs are also strongly linked to lower health care cost trends. Companies with at least 50 percent of their population enrolled in a CDHP have a two-year trend about half that of non-CDHP sponsors.
Both CDHP adoption and enrollment rates are increasing. Forty-seven percent of companies now have a CDHP in place – an increase of more than 20 percent compared with 2007. Forty-two percent of these companies have at least 20 percent of their employees enrolled in a CDHP, up from 27 percent of surveyed companies in 2006.
Best performers and those with consumer-oriented health care models are achieving significant cost savings by implementing programs that use financial incentives; focus on provider quality, data, health and productivity; and provide employees with information to make smarter health care decisions.”
The Maine Heritage Policy Center has a consumer-directed health plan for our employees, arranged through our benefit consultant National Worksite Benefit Group of Hallowell, Maine. According to their CEO Joel Allumbaugh, companies with these plans have experienced no premium increases or premium decreases over the last two years.
If your company does not have a Consumer-Directed Health Plan, you should consider it.