Frank Diamond
MANAGED CARE May 2008. ©MediMedia USA

Aetna releases a five-year study showing that companies that do this correctly can enjoy impressive savings

Consumer-directed health care, in which so many have placed so much hope for so little return, at least in terms of the number of enrollees, comes with a structural defect. Companies have decided that if they offer a consumer-directed health plan (CDHP), then they must offer only a CDHP, or else it may prove too expensive. Why? Because most employees would find the CDHP to be too risky and choose a traditional product. Those who would join would tend to be younger and healthier and more likely to roll over more money from one year’s spending account to the next year’s account.

Being able to roll money over is taken to mean that the employer shelled out more in pure health care expense that year than it needed to, although that might not always be the case, since many financial advisers say that members should pay their current expenses with after-tax money to allow before-tax money to grow, much like an individual retirement account or a 401(k) plan.

Aetna believes employers might begin thinking of health care rollover money as an investment, rather than a loss, if employees participate in a meaningful way in prevention and disease management programs, and it addresses the problem with a program it calls Aetna HealthFund, in which a CDHP can be offered along with, for instance, an HMO and/or PPO if the employer, with Aetna’s help, places a huge emphasis on prevention and offers rollover money, but not too much rollover money.

HealthFund employers can offer either a health reimbursement arrangement (HRA) or a health savings account (HSA).

“The high-deductible health plan (HDHP) may also be an HMO with a deductible,” says Robin Downey, Aetna’s head of product ?development. “The HDHP may be self-?insured or fully insured. Most employers offer a CDHP (HDHP and fund) as an option, meaning the employee has the option to select the HDHP/fund or another option offered by the employer, which may be an HMO, PPO, or POS plan without an associated fund.”

Six large employers participating in Aetna HealthFund have seen great results in cost effectiveness by carefully constructing the benefit design “so that the gap between the deductible and the fund was enough to continually keep the consumer being a consumer,” says Downey. “All but one put a cap on the amount that you could roll over. The employees are still getting a great benefit from a rollover, but they haven’t got so much rollover that for the next five years they don’t have to care what the deductible is because they’ve got enough money to overcome that deductible.”

Follow the money

She continues: “Employees do become possessive of the money in their HRAs, but they cannot put money in the fund and employees cannot take the fund with them if they leave. So they will spend it if they have claims. We find that in a HDHP with an HSA, they are more possessive since they can put their own tax-deferred dollars into the account. And whether you put the money in the HSA yourself or your employer does (or a combination of sources), the money is yours once it goes into the HSA and the HSA is fully portable so you can take it with you if you leave. So consumers are more possessive of an HDHP with an HSA than an HRA.”

The six best-in-class companies, according to Aetna, saw savings of $15 million per 10,000 employees over four years, according to a study released in January.

Aetna says that the six employers fully embrace what the insurer calls the four keys to a successful consumer-directed effort (See box at left).

Downey admits that much of what is in the four keys consists of “no-brainers.” The success of Aetna HealthFund, in fact the only way it can work, is through commitment of upper level management.

“These companies got their senior leadership involved in discussing with their employees what impact health care costs have on the bottom line,” says Downey.

This is quite a change for many executives used to considering their health plans as something the human resources department handled automatically each year.

Communication in Aetna HealthFund needs to extend far beyond the open enrollment period, Downey stresses.

“For most employers, especially the larger ones, providing health benefits is probably the second biggest expense a company has,” says Downey. “So why do you only talk about it when you do open enrollment?”

Chronic conditions

The CDHPs are not just for the healthy, she adds. “You can also be somebody who has chronic conditions, but is managing them. You’re diabetic but it’s under control. I’m taking good care of myself. I’m doing what I need to do. I have this condition. I have to take drugs. Or maybe I take such good care of myself I don’t have to be insulin-dependent. It’s really focusing on the wellness aspect of someone who has a chronic condition.”

Downey says that companies need to bestow concrete rewards for healthy behavior. ?“Reward them for taking a health risk assessment; that will give the health plan an idea of what the employee’s overall health status is. I’ll reward you, if you take the health risk assessment, with maybe $25 to $100. It’s not money that they’re just going to give you a check for. They’re going to put it into your HRA or your HSA account.”

Focusing on consumer pays off

Aetna earlier this year released a study to show how utilization and claims costs for members in its Aetna HealthFund program decreased. Six employers, in particular, experienced extraordinary results: a combined employer and employee savings of $1,500 per member over four years.

Aetna says that the six employers fully embrace what the insurer calls the four keys to a successful consumer-directed effort: offering wellness programs, fostering a consumer culture, conducting employee education and communication campaigns, and constructing a benefit package that includes appropriate levels of member responsibility.

Owens Corning, one of the companies that has had the most success with this program, stresses 100-percent coverage for preventive care and rewards for healthy behaviors and for completing a health risk assessment, says Mark Snyder, director of employee health, wellness and benefits at Owens. “This is a continuous effort,” he says.

Aetna President Mark T. Bertolini says that “the payoff is significant for those who embrace all the tools that influence health care consumerism.”

Companies see savings

Source: Aetna

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.