Consumer-Driven Plans Show Attractive Results

Consumer-driven health plans (CDHPs) are expected to be an even more attractive model for employers to adopt in coming years, according to Aon Consulting's Spring 2004 Health Care Trend Survey.

"Early returns on the impact of consumer-driven plans have been positive," said Bill Sharon, a senior vice president who directed the study. "Significant reductions in unnecessary care have been charted. Once the actuaries begin to see these results continue year [after] year, we predict that this will be reflected in trend rates and future trend lines will drop lower than other plan models."

Although Sharon said employers can expect double-digit increases of 14.1% for all types of medical coverage, he cautioned that those projections should not be taken out of context. "It's important to look at overall cost for health care programs. Our analysis reveals that a company can realize first year savings of up to eight percent of their cost if they implement an effective consumer-driven health care strategy. So, although consumer-driven plans will likely see the same level of increase as other coverage plans this year, considerable savings will still be recovered by making the switch. It all depends on the financial incentives and the resulting changes in consumers' health care consumption."

The Aon study noted that pharmacy rate projections—although slightly lower than last year—point to a 14.4% increase, showing that employers must continue to take a look at how their prescription drug coverage is designed.

Connie Perry, director of Aon Consulting's national pharmacy practice, said that as employees continue to play a larger role in their health care decisions, use of generic drugs is helping to lower the overall trend line for prescription drug coverage. "However, in the months to come, we will see discussion about expensive 'biotech injectable' drugs move to the forefront, so plan design in light of these innovations will be vital."

The Aon study noted that the role of biotechnology-derived injectable medications, which are used primarily to treat high-cost disease states for which previous treatments may have been either more invasive or unavailable, is important for companies to watch since their cost impact on health plans will become more pronounced as their use increases.