Consumer-driven health, the buzzword of 2007, is out, Aaron C. Davis, president of NextLogical Benefit Strategies, LLC, told a packed session at EBN's recent Benefits Forum & Expo in Washington, D.C. The new CDH, Davis said, takes consumer-driven health one step further and transforms it to "compliance-driven health."

Davis defined compliance as "both a patient's commitment to following accepted protocols of disease management [and] a health plan member's commitment to following accepted standards of wellness, health maintenance and improvement."

Needs are shifting, he explained, because the original CDH movement saw an "unrealized promise." To put it succinctly, consumer-driven health plans were prohibitively expensive for all but the "healthy and wealthy." Consumer-driven plans have failed to achieve significant cost reductions because of a lack of attention paid to their corresponding parts: chronic disease management and preventive care.

Data released in May from the Employee Benefits Research Institute indicates that while CDHP adoption still is growing, the plans cover a mere 2% of privately insured adults, or 2.3 million individuals between the ages of 21 and 64.

According to the Kaiser Family Foundation's 2007 annual survey, fewer than 3% of covered workers were enrolled in HSA-qualified HDHPs.

Davis admitted that CDHPs have not been a complete failure. He cited that HSAs offer "an unparalleled tax break, both now and in the future" and credits CDHPs with introducing cost transparency into the marketplace. He also speaks highly of the plans' abilities to allow consumer access to health care data.

But still, he says, flaws exist. "Brokers and consultants are coming around to say, 'These things really aren't working like we thought.'"

Fixing 'foundational flaws'

Davis said that research and anecdotal evidence are making the "foundational flaws" of CDHPs become more apparent. Among them is the fact that the plans place a high burden on employees to assume responsibility for the best course of care - something generally better suited to a physician. Also, high deductibles cause low compliance ratings, particularly in the pharmaceutical sphere. Last, individuals with high deductibles were more likely than their comprehensively covered peers to delay treatment for cost reasons.

Davis' session advocated a new twist on the consumer push. In his approach, "the benefit plan design removes financial barriers to care and supports health plan members in the avoidance of disease through health lifestyle incentives, as well as in the diagnosis, treatment, elimination or management of disease."

But there's no need to throw the baby out with the bath water, Davis said. In fact, companies that already have a CDHP are in prime position for a transition, he explained.

The key to designing a compliance-driven plan, Davis said, is to implement "a benefit plan design that removes all barriers to care. We need to support health plan members in the avoidance of disease and the elimination or management of their disease."

He advised benefit managers to create a sense of urgency within their organizations by asking senior management: How much spending authority am I granted? Most session attendees said they likely could spend under $1,000 without permission.

However, Davis said, when employers leave health care decisions solely in employees' hands, "you're essentially granting them control of tens of thousands of dollars of the company's money."

In today's economy, he reasoned, that's reason enough to have more oversight of CDHPs.

"Obtain senior management buy-in to manage your health plan strategically as human resource process/performance initiatives, and invest in the creation of a culture of wellness," Davis said.

He also encouraged benefits pros to research a variety of systems, while questioning what will work best for your population: What are your main cost drivers? What types of efforts will most benefit your audience? Is it education, prevention or disease management?

Doing the proper regulatory homework also is essential, Davis said, including knowing the guidelines for creating a HIPAA-compliant wellness program.

Developing a plan

Next, it's important to lay a framework for the compliance-driven plan. Davis suggested developing a three-year strategy to:

• Identify which metrics to track and consider alternate vendors if necessary. Be sure that all plan information can be placed in a central repository where all systems interact for maximum efficacy.
• Introduce the concept of compliance. "Work with your advisers and medical management vendor(s) to determine what it means for a patient to be 'compliant,' and what the process will be to label a member as 'compliant' or 'noncompliant,'" said Davis.

• Critical determinations include: who determines compliance, clinical disease management criteria, communication channels to inform employees about compliance status and available services, and how to notify members of noncompliance.
• Determine what happens if a member is noncompliant. Will you use a carrot or stick approach? What will be the financial value of each reward or penalty? Make sure this is HIPAA-aligned. Will the reward/penalty affect an entire family or just a specific member? Is the impact of compliance/noncompliance immediate or upon renewal? Are there Section 125 issues to consider?

After all of this information is complete and checked for legalities, design a marketing strategy to announce the program to employees. (See page 28 for tips on how to design a better benefits communication program.)

Implementing the plan

When the plan is ready to implement, employers must lay the foundation for a "culture of wellness" by placing targeted health information into employee benefit communications.

Begin educating employees as far in advance as possible and be sure to explain how this will affect them as individuals, as well as the overall corporate strategy.

Remember that employees are most concerned with out-of-pocket costs, Davis said, and be sure to break down charges accordingly. Plan face-to-face meetings when possible.

Once in place, be sure to maintain open communication lines among employees and vendors to ensure maximum efficiency and expediently delivered data that can be used to calculate ROI.

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