Due to the increase in medical expenditure by employees, employers are looking for new ways to control expenditure without forfeiting the health care quality obtainable in traditional health plans. The consumer-driven health strategy was initiated based on the idea that health care services are over utilized and therefore providing financial incentives to consumers will lessen the use of those services that are unnecessary. Furthermore, patients are motivated to look for lower-cost health care providers. Though there is proof of overutilization of some health services, it seems underutilization of services is a bigger problem (EA, et al., 2003). Most times overutilization is as a result of health providers and not necessarily the consumer.
The usual consumer-driven health model in the marketplace is a combination of a high deductible insurance plan with a health reimbursement account to cover part of the out of pocket cost of health care expenditure. The health reimbursement account is a specific benefit amount used to pay for specific health costs defined by the employers. The unused amount in the health reimbursement account can be carried forward into subsequent years but once an employee leaves their employer they forfeit the balance. Usually consumer-driven health plans are an added alternative for employers however some employers employ it as a substitute product to the traditional medical insurance.
With the consumer-driven health plan, consumers tend to be more responsible when purchasing their health services (Burns et al. 2012). The carry over provision on the human reimbursement account motivates consumers to view healthcare as a continuing, lifetime process that should be keenly managed rather than view it as a single year benefit that is either utilized in that year or forfeited. Consumers tend to better understand their medical condition as they are more actively involved in using the medical information tools offered alongside the consumer-driven health plan. Though at times owing to lack of reliable data, the information required to make better health care decisions may be unavailable even if it is available, the data may not be obtainable by all users as some users are not savvy enough to find their way through the internet and get information. As a result this could lead to consumers selecting poor health care providers and enrolling for a poor medical plan thus getting poor ongoing treatment. Moreover, the human reimbursement account of the consumer-driven health plan may influence the timing of treatment as some consumers may reschedule treatment until the human reimbursement funds has enough funds.
Due to consumers taking a more active role in choosing their providers by being more conscious of cost and quality, health providers find themselves in a competition for patients as consumers tend to enroll with health providers who have lower costs but offer quality services. This may lead to competitive fee structures and personalized negotiations amongst health providers and the patient. Moreover, health providers are held more accountable as they are extensively evaluated on the outcome as well as for providing perceived value. Operating in such a competitive marketplace could lead to inappropriate incentives and various inefficiencies to medical providers. Implementation of a rating system would probably require significant amount of time and would also create room for a lot of complaints in regards to its inefficiency. If there is no established definition of quality, health care suppliers with lower ratings may argue against the authenticity of the rating system. The administrative requirements needed to ensure the rating system is satisfactory may divert resources from health care providers primary objective of administering medical services. On the contrary health providers may find greater fulfillment in dealing with patients who are better informed on their health issues and therefore take more active management of their own health CITATION Ame04 \l 1033 (American Academy of Actuaries, 2004).
American Academy of Actuaries. (2004). The Impact of Consumer-driven Health Plans on Health Care Costs. Washington, DC : American Academy of Actuaries.
Burns, R., L., Bradley, E. H., & Weiner, B. J. (2012). Shortell & Kaluzny's Health Care Management: Organization Design and Behavior,6th edition. New York: Delmar, Cengage Learning.
EA, M., SM, A., J, A., J, K., J, H., A, D., & EA, K. (2003). The quality of health care delivered to adults in the United States. N Engl J Med, 2635-2645.
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