Health plan consumerism: Who is the consumer?

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By Daniel F. Bostedt | 23 April 2014

Many employers are moving to a “consumerism” approach for health plan management in response to the financial impact of the Patient Protection and Affordable Care Act (ACA). The goal of consumerism is to help motivate plan participants to become healthier and more prudent purchasers of healthcare services. Current consumerism focuses all attention on plan participants. In the future, should that focus be expanded to include another group? Should employers partner with accountable care organizations (ACOs) being developed under the ACA to help facilitate that expanded focus?

Physician-focused consumerismSM (PFC):
A set of initiatives designed to align physician decision making with high-quality health care outcomes provided in a cost-efficient manner. PFC can include the redesign of financial incentives, greater access to patient data, decision support tools, on-going education about treatment alternatives, and an understanding of the financial impact of alternatives on patients. It can be the basis for collaborative efforts between employer health plan sponsors, provider systems, and physicians to help achieve high-quality care in a cost-effective manner.

At its core, participant-focused consumerism can include:

  • Providing cost and quality data, decision-making tools, and educational material to participants
  • Implementing wellness programs that coach, educate, and incentivize better health
  • Adding concierge services to help participants find alternatives for specific healthcare needs
  • Establishing plan designs with financial incentives to drive prudent health plan usage

As we hurry down the path of participant-focused consumerism, perhaps we need to step back and ask some fundamental questions:

  • To what extent can the average participant be expected to look for and absorb all of the information necessary for the best healthcare decision? Will they do so under the time constraints of serious illness and emotional situations?
  • Who do participants naturally turn to when making treatment decisions and at what point in the process?
  • To what extent will provider marketing and local reputation win out over objective data?
  • Do participants understand disease progression sufficiently to realize the future health and cost consequences of treatment they forego now because of out-of-pocket costs?
  • Are participants primary or secondary decision makers in the treatment process?

The key to future consumerism includes the recognition that plan participants become secondary decision makers as treatment progresses. They certainly “open the door” of the healthcare system when seeking treatment, but once that door is open physicians generally determine next steps. Physicians influence and initiate a material portion of healthcare spending and are more informed about alternatives and disease progression than participants. That is why the future of consumerism should expand to include physician-focused consumerism.

Like participant-focused consumerism, physician-focused consumerism will need a combination of financial incentives, education, cost and quality data, and decision-making tools. It will require understanding of the financial impact on patients of alternatives chosen, and need to include access to complete patient information, regardless of the place of treatment.

Incentives will be an important part of physician-focused consumerism. Providing the right incentives will be key. For example, some prior physician incentives did not properly compensate for risk, such as early health maintenance organization (HMO) reimbursement schedules that did not account for patient and condition mix. Other physician incentives may need to change to better align behavior with the cost efficiency goals of the ACA, as well as health plan sponsors and their participants. Historically, incentives have been influenced by fee-for-service payments, usual and customary fees, facility and equipment ownership, prescription drug programs, and provider system remuneration.

The ACA may provide a platform for kick-starting physician-focused consumerism, because it includes incentives for provider systems to become accountable care organizations (ACOs) and develop processes to deliver high-quality care on a cost-efficient basis. This current activity may be the opportunity for employer health plan sponsors to help drive and influence physician-focused consumerism as part of the solution. Employers may want to:

  • Reach out to providers in their area on a collaborative basis and partner with them to include physician-focused consumerism as part of their ACO development
  • Utilize health plans and provider networks that actively address and support physician-focused consumerism
  • Support regional and national efforts to better assess quality and cost efficiency measures and supply data to such efforts
  • Support efforts for national or regional patient data systems
  • Work with medical schools and teaching universities regarding the financial impact of physician decisions on employees

Participant-focused consumerism remains an important part of health plan management. Physician-focused consumerism could be a complementary and perhaps more impactful sequel.