Between doctor visits, Jennifer Butler manages her diabetes with a little help from her friends. The 31-year-old checks her own blood sugar levels and adjusts her insulin dosage. She uses the Web to reach an active community of online diabetics and the expertise of leading diabetes specialists. She can order supplies online and track the latest research. For example, when fast-acting insulin was developed a few years ago, Butler researched the development online and told her doctor she was interested. The doctor approved the change, and Butler now uses the new insulin. "When you go to your doctor armed with information, you become your own advocate," says Butler, who lives in Fredericksburg. "We can become experts in our own care by becoming more informed."

Jennifer Butler searches the Net for information on diabetes. Photo by Mark Rhodes

Call it empowered consumerism, the latest trend in health care. From patients’ rights legislation to medical savings accounts and new Web sites for checking out doctors and nursing homes, consumers are coming into their own as a powerful force in health care markets. Helping to speed the consumer-friendly trend is the Internet which enables people to do things that weren’t possible just a few years ago. Patients can interact with insurance plans, communicate with doctors, buy prescription drugs online. And people with diagnosed health problems such as Jennifer Butler are more confident when it comes to shaping their own health care. The trend got a major boost in early August when the U.S. House of Representatives passed a bill that greatly expands consumer protections for patients who belong to HMOs while limiting suits against them.

The trend toward consumer rights is playing out against a backdrop of low unemployment and rising health care premiums. Despite the economic slowdown, the labor market remains tight in Virginia — unemployment averaged 3.1 percent in June — so employers must find ways to improve health benefits to recruit and retain good employees. Last year, four years after starting their business, General Mechanical Services in Salem, Phyllis and Steve Huff began offering health coverage to their 24 employees. "We have a good group of men working with us who know their craft well. We wanted to keep them," says Phyllis Huff. A year later, when the company renewed the health plan, premiums rose by 11 percent.

Keeping good workers is why employers have swallowed rising premium costs in the past few years, but that’s becoming more difficult. Premium prices this year are expected to rise 11 percent nationwide, and many employers are seeing increases of 20 percent or more, says Barb Bailey, a Richmond-based health care consultant with the consulting firm of William M. Mercer Inc. She says one of her clients, in the wholesale plumbing business, "had to pass along a 28 percent increase to their employees. Another national client in the service industry saw a 68 percent increase in their HMO rates this year. That’s huge." Mark Pratt, executive director of the Virginia Association of Health Plans, says, "We enjoyed a period in the mid-90s where premium increases were at or below the rate of inflation. That’s no longer the case." Fueling dramatic premium increases for HMOs is consumer demand for expensive drugs and consolidation among health plans, which minimizes competition.

Some companies are passing along increases while others are taking a more cautious approach in a tight labor market such as dropping ancillary disability plans or increasing employee deductibles. In the short-term, growing consumer clout might boost health care costs. For instance, the patients’ bill of rights passed by both houses of Congress guarantees access to emergency care, medical specialists and medicines and allows patients to sue HMOs over coverage denials — moves some would argue will raise costs. Plus, companies will be scrambling to offer more options as health care undergoes a revolution sparked by the emergence of e-health plans.

Yet in the long run, consumerism could help control costs. With the Internet and e-commerce as key drivers, employers are moving in a new direction — putting employees in charge of their health plans and shifting some of the responsibility for cost containment to them. Lumenos, based in Alexandria, is one of only a handful of companies nationwide administering Web-based, consumer-driven health plans. Mary Angela Shannon, vice president of marketing and communications, says the system eliminates many bureaucratic hoops. Shannon, who has been using the system for over a year — the first commercial clients started only last month — is delighted with the control. "Under my old plans, I’d have to ask my primary care doctor for permission to see an allergist for ongoing allergy shots." Now Shannon decides whom she’ll see and when, with help from an Internet database that provides patient ratings of doctors, an estimate of fees and any discounts she might get.

The Lumenos system is being sold to large, self-insured employers, which use it to encourage employees to shop smarter for health care. These employers put a certain amount, say $2,000, into a Health Savings Account for each employee. Medical claims are paid right from the account, so employees know precisely how much each doctor visit or treatment costs. Leftover money rolls over into the next year. Or employers can designate an amount for preventive care with a use-it-or-lose-it proposition to encourage employees to go for annual exams and health screenings. If the employee exceeds what’s in the health account, he pays a "bridge" — an amount between the account total and the point where the high-deductible, traditional insurance kicks in. Since Shannon sees the visit charge withdrawn from her account, "I’m much more aware of the costs." That’s a critical point, says Pratt. "It’s essential that consumers have a better understanding of what their medical costs are. If they’re buying prescription drugs with a $5 or $10 co-payment, the average consumer has no idea of what the true cost is."

People want to make their own decisions and they want to save money, says Shannon. The Lumenos strategy gives them a chance to do both. "We believe it will ultimately save money" for employees and employers, she adds.

Much like companies reacted to cost pressures in retirement plan financing two decades ago by shifting from defined pension plans to employee-choice 401ks, so are companies moving in a similar direction today with health care. Rick Galardini, vice president of the mid-Atlantic region at Hilb, Rogal and Hamilton Company, says this emerging trend gives employees a fixed amount of money that they can use to purchase their own health care. "For example, you can say, ‘Here’s $554 a month and here are a menu of products you can buy for that.’ If the employee wants no health care, he or she can buy life insurance or put it in the 401k or buy high-end dental care to supplement a plan the spouse might have." However, that approach could fail if it doesn’t account for the difference between the insurance needs of someone age 30 versus a 60-year-old. The $554 would be too much to spend on the younger worker and not enough for the older one. And if younger workers didn’t buy into the health services, such plans would be under funded.

Until this trend catches on across the mainstream, though, employers must continue to search for new ways to cut rising health care costs. One new trend allows health care plans to sell their data. This past summer, Trigon Blue Cross Blue Shield launched its Customer Information System, which gives large businesses 24 months of data showing what health services their employees are using. "You can slice and dice the information any way you want it," says Ronald Milligan, a Trigon vice president who markets the program to large businesses. The system will eventually be made available to medium-sized companies, but none smaller than 300 employees. That number ensures there’s enough data to track trends and still makes it impossible to identify individual workers. Protecting patient privacy has been a big issue in the development and pilot testing of the program.

With this data, benefits managers will be able to tweak their programs, says Colin Drozdowski, vice president, medical informatics and provider network management. "If they want to increase the co-pay on a particular specialty because it looks like it’s being overused or used inappropriately, they can. And then they can see whether the anticipated outcome is being realized." Or, the company can encourage workers to take preventive tests, such as measuring cholesterol levels, by lowering out-of-pocket costs or distributing promotional material.

With a huge population of baby boomers moving into the post-50 ranks, it’s unlikely that health care costs will drop any time soon. In the meantime, employers will probably find themselves swallowing some bitter medicine. They’ll either have to pay more themselves, or find ways to shift more of the costs to employees. And before consumerism can help, it must reach a level of maturity. Right now, its focus has been primarily on information and access to health care with 30 million people logging on the Internet a year in search of health information. In Virginia, consumers can now do background checks on their doctors at www.vahealthprovider.com, although the Web site doesn’t contain complete data on some disciplinary actions. The next step is for patients to assume more responsibility for their health care. That rings true for Butler, who has used the Web to select an eye care specialist and obtain a state-of-the-art insulin pump. "The more information you have, the better you are at making decisions about your health," she says. So while health care isn’t getting cheaper, it can get better.