Evolution of Consumer Driven Health Plans Blog Series: Part 5

February 18, 2016

Evolution of Consumer Driven Health Plans Blog Series: Part 5


Part 5: Best Practices to Empower Consumer Driven Healthcare

This is the last article in our five-part series, “The Evolution of Consumer Driven Health Plans: From Cost Shifting to True Healthcare Consumerism.” The goal of the series is to help employers and plan managers assess both the positive and negative consequences of CDHPs, and to recommend steps they can take to better equip employees to be informed healthcare consumers.  In our last article, we assessed the impact of CDHPs on employee finances, health and satisfaction.  Here we will recommend changes to the CDHP delivery model that remove obstacles to true healthcare consumerism.

Unfortunately, to date, most of the focus of CDHPs has been on employer cost shifting versus addressing the root cause issues that inhibit smarter healthcare decision-making. Cost shifting is only a short term fix. The full benefit of a CDHP model can only be realized by employers when they couple high deductible plans with changes in the actual healthcare delivery model. The goal of CDHPs is not to limit care when care is needed, but rather to enable consumers to receive the quality care they need at the lowest cost. Below are five key priorities employers should consider to address systemic inefficiencies and facilitate a smoother transition to healthcare consumerism for their employees:

Empower Primary Care Providers

With an increasing number of medical specialists and a shortage of PCPs, the role of primary care providers, including physicians, nurse practitioners and nursing aides, has changed over the years. The average PCP has 2,300 patients and takes between 20-30 appointments per day. According to an analysis reported in the Annals of Family Medicine each physician would have to spend 21.7 hours per day to provide all recommended acute, chronic and preventive care for a panel of 2,300 patients. Since PCPs today can only spend on average 11 minutes per patient encounter, the range of services they provide has narrowed dramatically.

Studies have indicated that greater primary care availability in a community is correlated with both better health outcomes, and a decrease in utilization of more expensive types of health services, such as hospitalizations and emergency department visits. Deeper PCP relationships have been shown to drive better health outcomes through;

  • better access to health services
  • improved quality of care
  • emphasis on prevention
  • the identification and early management of conditions
  • reduction in unnecessary specialist care 

Creating a Culture of Transparency

For consumers to make smarter healthcare decisions, they need access to cost and quality data that, to date, has not been readily available. Prices for medical services can vary greatly - even for the same procedure, in the same area, within the same network. Quality and outcomes can vary just as significantly, with no relationship to price. The only way to know whether you're getting good care at a reasonable price is to see the data. Despite years of measurement efforts, patients, employers, public purchasers, health plans and even providers, have almost no reliable information about the relative cost and quality of healthcare services. Value-based healthcare requires transparency.

Today, however, PCPs are a patient’s main entry into the healthcare system. PCPs have long played the gatekeeper role, deciding if, when and where their patients should go for specialist treatment. With greater transparency, PCPs would be able to refer patients to specific providers on the basis of factual cost and quality data vs. network affiliation. This would create a culture of competition that is sorely lacking today. 

Improve Employee Access to Care

Lack of easy access to care is a major inhibitor of cost-effective delivery. Employees without access to primary care are forced to use more expensive urgent care and emergency room services. For those with PCPs, access when they need it can still be a challenge. Scheduling appointments with busy doctors can be very difficult, and nearly impossible outside standard business hours. Under the fee-for-service model, every physician interaction is based on an in-office visit because other forms of patient support aren’t reimbursed. This outdated model of delivery is highly inconvenient for patients and inefficient for providers. Patients need phone and virtual access to providers to be able to address their health concerns when an office visit is not required.

Improved Cross-Provider Collaboration

The fragmentation of care delivery drives costs up and patient satisfaction down. Slow adoption of EHR systems and lack of physician coordination results in up to $226 billion of dollars of unneeded and repeat tests each year. When one or more specialists get involved, patient ownership often becomes unclear. Models where PCPs play a larger role in coordinating care across providers have been proven to simplify care and save money.

“One of the ways we help save money is through our referral process. We have a group of specialists that we work with that take care of our patients the way we want our patients to be taken care of…We are able to work with the specialist as a team to coordinate lab work, imaging, any of those things that need to be done to help save the patient not just time but also money.”

- Dr. Kristianna Roberts, Paladina Health 

The two main advantages of greater collaboration are; (a) informed specialist selection, and (b) greater efficiency in the performance of test procedures. Not all specialists are accustomed to working closely with PCPs, and those that are reluctant to move to a more collaborative model will be excluded as our healthcare system evolves.

Compensate Providers Based on Outcomes vs. Services Delivered

First and foremost, employers need to address the misalignment of incentives by seeking alternatives to the fee-for-service model to enable the culture of consumerism envisioned by proponents of CDHPs. There are three predominant alternative payment models beginning to emerge in the U.S. These alternative methods of payment create incentives to encourage preventive care and better care coordination, especially for patients with chronic illnesses.

  • Bundled or capitated payments, which are fixed amounts paid to health care providers for a bundle of services or all the care a patient is expected to need during a period of time
  • Patient-centered medical homes, which are redesigned primary care practices that focus more on preventive care, chronic disease management and patient education, and care coordination between different health care providers
  • Accountable care organizations, which are groups of health care providers who agree to share responsibility for coordinating lower-cost, higher-quality care for a group of patients

All of these models have merit, and they aren’t mutually exclusive. For instance, in a patient-centered medical home, providers might be partially reimbursed based on a capitation model and may have another portion of their compensation based on patient outcomes such as net promoter scores, population health and patient engagement. These alternative models have been conceived to both lower cost of healthcare delivery and improve the patient experience and ease of navigating the healthcare system.


Employers who continue to see CDHPs purely as a cost reduction vehicle are at risk of alienating employees and experiencing increased rates of employee sickness due to healthcare avoidance. Migrating large numbers of employees to CDHPs without also offering alternative care models is only a short term fix. To reap the true benefits of consumerism, employers need to go beyond simple cost shifting. Fiscally speaking, while employers have enjoyed a short term favorable expense benefit from CDHP expansion, the savings from a more comprehensive delivery model shift would be much greater.

Socially speaking, to call the current state of affairs consumer driven is inaccurate. If we truly want to put consumers in charge of their healthcare decisions, we need to arm them with access to the right care in the right care setting. Employers need to take a more comprehensive approach to their consumer driven health plans; an approach that includes both coverage and care models aimed at reducing costs and improving quality. Those employers that can deliver on both innovative coverage and care will reap benefits in employee satisfaction, employer reputation and cost control. To learn more, download the full white paper.

Receive Blog Updates

Receive Blog Updates