CONSUMER-DRIVER HEALTHCARE: PROMOTING ACCOUNTABILITY

Consumer-driven health care is coming--in one form or another. It is an inevitable consequence of social, demographic, economic, political and market forces, which are interacting to transform the organization, delivery, and financing of health care.

Employers have a significant stake in what happens in the healthcare delivery system, but their role in healthcare is evolving, along with the roles of other key players. Moving toward a more consumer-directed healthcare system is a smart move for everyone, because it drives individual accountability and promotes awareness of different costs and alternatives.

Under the current system, employees are shielded from the true cost of healthcare and have no real incentive to be prudent purchasers of their benefit options. Often they do not recognize the employer outlay for health benefits as part of their compensation package. As with any subsidy, demands for services rise.

While employer financing of health insurance has provided financial security to over 150 million Americans, fewer workers each year have a connection to the large employers who are best able to sponsor comprehensive coverage. Most experts feel it is inevitable that over time many employers will move to a defined contribution system for healthcare to limit decision-making responsibility, decrease liability for health care outcomes and enhance predictability of costs. Developing a parallel system of alternative market solutions will also expand access and lower costs.

This evolution to more consumer choice and control through defined contribution mechanisms will benefit all healthcare stakeholders because it creates much greater accountability. It will allow employees to shape their own healthcare benefit options--an important advantage as the workforce becomes even more diverse and preferences for health coverage similarly varied. Individuals should be able to access the kind of health care coverage that meets their particular needs and those of their family at a given stage of life.

Informed consumers paying with their own healthcare dollars will have more incentive to consider healthcare value and make wise choices. As patients become increasingly responsible for the cost of care they will be much more discriminating about what diagnostics and therapeutics they receive. They will begin to make trade-offs and this will help address the problem of infinite demand. Dictating or mandating these choices for employees creates resentment, but empowering them to make choices for themselves could be a positive force for real change--and politically palatable!

At the current time, public opinion is not likely to support precipitous and fundamental changes in the health care financing system. Employers are wary of transitioning150 million workers and their families into alternative purchasing arrangements unless there is a viable and stable market with suitable products.

But there are several steps that can be taken now to promote more consumer control and accountability and address the crisis of the uninsured.

Tax and insurance market reforms are desperately needed to level the playing field. Individuals and small business should have the same tax advantages for the purchase of healthcare as those enjoyed by employees of large business. Tax credits, refundable for lower-income people, give everyone a basic level of resources to buy a health plan and move the nation toward universal coverage through incentive, not mandate.

Small employers need to be able to pool together their resources, minimize variances in risk, and share fixed overhead costs. Tax and regulatory barriers that prevent the creation of competitive private health care purchasing groups should be eliminated.

Even with these changes, some companies may be unable to sponsor group plans because of cost or concerns about potential liability. For these reasons, we should also encourage greater use of tax-free employer contributions to a health plan owned by an individual.

The paternalistic era of medicine is over. Information technology and the Internet will enable the move to a more consumer-driven healthcare system by providing individuals with the ability to understand their illnesses, improve their health, evaluate and select health plans and providers, and interact with care givers.

What about the role of employers in this new system? Employers cannot ignore the fact that poor health care choices mean more lost work time, higher disability costs, and lower productivity. With an aging workforce and shrinking labor market, wise employers will support their employees and serve their own interests in the consumer-directed healthcare system of tomorrow in at least three ways.

First, by empowering their employees by allowing them to choose the health plan that meets their unique needs.

Second, by ensuring employees have access to consumer and lifestyle education to help them make wise choices.

Third, by maintaining a focus on quality by becoming brokers of information about health plans and provider performance, especially on those plans and providers who best manage chronic disease.

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