Consumer-driven health is a shoo-in for the health care buzz-phrase of 2007.

All year, dozens of surveys, reports and white papers detailed the impact of consumer-driven health plans on the employer market. Despite the volume, however, the messages were anything but uniform. Depending on the source, CDHPs end 2007 as either the greatest thing or the worst idea ever.

In February, health data firm Vimo ranked the nation's most affordable health savings accounts, where American Chartered Bank tied with six others for first place. Although Vimo CEO Chini Krishnan called HSAs a "wonderful, triple-tax-advantaged savings vehicle," he also acknowledged they also are "a relatively new animal for most people," and that "it's difficult to make an apples-to-apples comparison among the hundreds of different offerings. It's hard for people to make informed choices."

Perhaps because of the confusion among consumers, "people seem hesitant to recommend them to their friends and family members," comments Sara Collins, assistant vice president at the Commonwealth Fund. Plus, "I think people really aren't liking the out-of-pocket costs."

A survey conducted by The Commonwealth Fund and the Employee Benefit Research Institute in early 2007 revealed that just 1% of the privately insured population, or 1.3 million adults, were enrolled in an HSA or health reimbursement arrangement as of September 2006, the same rate as 2005.

As 2007 continued, however, research shined more favorably on CDHPs. In September, Aon Consulting and the International Society of Certified Employee Benefit Specialists reported that 37% of 470 employers offered a CDHP, up from 28% in 2006 and 22% in 2005. Among that number, 42% provided HRAs, 48% offered HSAs, and 10% offered both.

The study concluded that employer contributions to CDHPs and the presence of other plan options helped boost acceptability levels among employees.

"The majority of employers offer a CDHP as an optional plan, since these plans operate very differently from an HMO or PPO, and it takes time for employees to become comfortable with a new type of plan," remarks Bill Sharon, senior vice president at Aon Consulting.

Indeed, employers' investment and interest in CDH will determine the future of the movement. Exante Bank, a division of UnitedHealth Group, studied enrollment patterns of 25,000 individuals who have opened an HSA and found that 91% opened an account with employer-funded assistance, compared to just 45% of those who did not have employer backing.

Says John Prince, CEO of Exante Bank, "If we want to get engaged consumers, then employers are a key catalyst in driving HSA adoption."

2008 predictions

Proponents believe HSA adoption rates will increase further in 2008, due in part to legislation approved in December 2006 that increased the amount of money employees and employers can contribute to the accounts. The law also allows participants to make a one-time transfer of funds into an HSA from a health reimbursement arrangement or flexible spending account.

"I think we'll see an impact in 2008," says Carl Mowery, director of compensation and benefits for SMART, an advisory and consulting firm. "We have clients who are looking at HSAs more seriously now. I would be surprised if we didn't see a larger-than-normal increase with adoption of HSAs."

A survey published in September by Watson Wyatt and the National Business Group on Health concluded that 40% of companies will offer an HSA in 2008. Furthermore, 5% of employers now offer a CDHP as the only option, and another 4% plan to do so in 2008.

Widespread adoption of CDHPs could keep premiums low, experts contend. However, only 5% of covered workers use such plans, a report published in September from the Kaiser Family Foundation and the Health Research and Educational Trust concluded.

"Consumer-driven plans have established a foothold in the employer market, but they haven't grown as much as one might think, given all the attention that they receive," KFF Vice President Gary Claxton recently told EBN. "[But] the health plans are still pushing these things. This is really their only new thing."

Claxton raises an excellent point. Consumer-driven health is the catchphrase of 2007 for the health care industry, and is likely going to be so for 2008 as well, at least until the myriad health care proposals by presidential candidates steal the stage.