Return to Virginia Business - November 2002

Confronted with Choices
The consumers’ role as a health care recipient

Related links:
— What is Medicaid?
— Should Health Care be a Priority for Virginia?

Thanks to computers and the Internet, consumers have more choices to make regarding their health care services. To be considered are competing plans and providers as employers scramble to keep the lid on rising benefits costs. There are also choices for self-care and tools for preventive medicine and managing chronic diseases. Fully informed consumers are becoming more important medical decision-makers than ever before.

Giving Employees a Choice
Several trends are emerging that put more of the decision-making in the hands of the consumer. One offers employees a set spending allowance along with a cafeteria-style benefits plan. Under this plan, known as defined contribution, employees have a set dollar amount to “buy” benefits from a menu of options.

Participants decide which options best suit their individual health care needs and the employer ends up controlling health care costs better by only funding benefits that the employee really wants. The end result – the employee has a greater stake in making informed, cost-effective decisions because they are now part of the payment process.

Of course the idea of an employee-choice program with different options and varying levels of care can be confusing. If the employee chooses the wrong package, the financial results could be devastating in the event of a medical catastrophe. However, the process forces the consumer to take a more active role in his benefit choices while making them realize that health care involves much more than a simple $10 co-pay.

Another new idea being implemented is disease management. Rather than rationing services for ongoing illnesses (such as diabetes and asthma) through managed care, employers are committing large investments to early prevention and care in an attempt to realize greater savings over time. National insurers like Aetna and UnitedHealth Group are devoting greater resources to such programs. A recent example cited in BusinessWeek involved a program that General Motors rolled out that has reduced emergency room visits by more than 40 percent and hospital admissions by 15 percent, thus bringing GM savings in health care costs and employee productivity.

Along with new benefits plans, the Internet has also opened up a world of health education possibilities to today’s health care recipient. Available at the click of a mouse is the latest scientific information on new clinical trials, independent tests, reports from respected medical journals and pharmaceutical breakthroughs. This information can be both empowering and overwhelming for patients. It can also serve as a valuable asset to the health care system since an informed patient will be less inclined to demand a wide array of expensive (and sometimes unnecessary) diagnostic tests, especially if he is sharing in the expense.

Measuring Health Care Quality
Better-information helps empower patients to make more intelligent decisions. However, to truly put the decision-making in their hands requires a set of universal standards. A common goal has to be the public availability of reliable information on health care quality. This goal was first put forth on a national level in 1998 with the creation of the President’s Advisory Commission on Consumer Protection and Quality in the Health Care Industry. The commission looked at existing quality issues in the health care system and cited several areas, such as the underuse and overuse of services, where American health care needed improvement.

In the last decade many public and private groups have developed strategies to measure and improve the quality of health care. For example, New York State’s Department of Health releases data on the quality of heart bypass surgeries at all in-state hospitals, General Motors provides its employees with report cards rating health plans and the quality of their care, and The Pacific Business Group on Health requires all health plans to set aside 2 percent of their premiums and only allows high-performance plans to retain those funds.

Developing Quality Standards
Health providers, physicians, nursing homes and health plans must develop accurate performance and quality measurements. This information needs to be publicly available in a format that does not compromise patient confidentiality. Some form of comparative performance information should include quality of care, financial information and patient satisfaction. And quality indicators must be based on current scientific standards.

State and federal regulatory systems must be redesigned to ensure that quality protections — including peer review, professional certification and facility safety standards — relate to service intensity and are consistent across all care delivery facilities.
Public/private partnerships must be assembled to promote health care accountability programs that support consumer-informed choice of plan and provider options.

Administrative systems and procedures need to be standardized and automated to improve the efficient collection and availability of health care data. The collection and distribution processes must also protect the privacy of the patient, while allowing access by qualified health care givers.

Virginia’s health care system must continue to invest in the Internet and other communication technologies that fully allow patients to actively participate in both self-care and shared medical decision-making. These same systems can also facilitate the efficient delivery of quality comparative data mentioned earlier. Once these key initiatives are in place, the consumer will have the necessary tools at his disposal to make informed choices when it comes to his own health care needs.

Return to Virginia Business - November 2002