| Consumer-driven healthcare. Sounds great doesn't | | | | find the tax benefits attractive. Medical costs will |
| it? Knowing what it really is and how it will affect | | | | be a smaller percentage of their income, than |
| you personally, and if you run a business, | | | | medical costs are of lower income people. They |
| professionally is important. | | | | may choose the approach for the tax benefits |
| What IS Consumer-Driven Healthcare? It is the | | | | alone. |
| label being used by benefit consultants and | | | | - Very high income individuals, who when they do |
| insurers to mean the laws, products and services | | | | see medical professionals, plan to see the best of |
| designed decrease health care benefit liabilities of | | | | the best, regardless of who or what is covered |
| companies and provide customers the | | | | by their plan. They pay out of pocket and THEY |
| "opportunity" to choose and pay for their own | | | | control, what medical services they choose. |
| health expenditures. | | | | - Chronically ill individuals, who still struggle with |
| Since healthcare costs have risen 4 times faster | | | | their health, for whom conventional approaches |
| than inflation over the past 20 years and rises | | | | have NOT been successful, may find the freedom |
| continue year after year, many healthcare | | | | to choose liberating. |
| consultants believe that consumers do not | | | | - People who are dissatisfied with the way their |
| understand the real cost of the services they | | | | healthcare has been provided in the past. It will |
| consume, so they believe that, when consumers | | | | include people with negative health outcomes. |
| have to pay more up front costs, they will | | | | - People who prefer "alternative" , complimentary, |
| become wiser medical consumers. | | | | holistic, preventative care to conventional US |
| Most people with health issues are pretty savvy | | | | medical approaches will also have a framework, |
| about treatment options, due to the Internet. | | | | where as consumers, they can indeed direct their |
| However, medical pricing is been complex, tied to | | | | healthcare expenditures to those modalities which |
| diagnostic and treatment codes, and tiered with | | | | match their philosophy the best. This is |
| discounts as complex as airline discounts, so it is | | | | consumer-driven at its best. For recent |
| not surprising that we not totally understand | | | | immigrants and those who believe in a more |
| these costs. What is hoped is that | | | | holistic approach, this is very good news. |
| consumer-driven healthcare will drive providers to | | | | With over half the population having made at least |
| educate their patients about this. | | | | one visit to an "alternative" practitioner in the past |
| Laws allowing tax deduction for monies placed in a | | | | calendar year, and with expenditures for |
| Health Savings Account or HSAs (and their | | | | alternative care equaling expenditures for primary |
| predecessor Medical Savings Accounts) are the | | | | care, internists, pediatricians and OB-gyn |
| driver of adoption of these plans. Several million | | | | practitioners (New England Journal of Medicine |
| accounts have been opened in the past two | | | | Studies 1993, ...) it is clear than many US |
| years, but 2006 is expected to have major | | | | consumers trust these holistic alternatives. This |
| expansion of these accounts and more employers | | | | makes the decision about approach cleaner. It will |
| offer more options. The accounts work like your | | | | not be about what is or is not covered by |
| retirement IRA's or 401Ks, with the exception, | | | | insurance; the decision will be about what is the |
| that it is expected that some monies will be | | | | best choice, given your own perspective and |
| withdrawn for medical expenses. These accounts | | | | healthcare experience and beliefs. |
| need to be paired with a high deductible major | | | | However HSAs and high deductible medical plans |
| medical type plan, which kicks in after the | | | | are not for everyone. They tend NOT to be a |
| deductible, which is typically $2,000 to $5,000 of | | | | good fit for the following: |
| eligible expenses per year. Over time, companies | | | | - People with chronic diseases, who spend more |
| will tend to pay for the high deductible coverage, | | | | than $2,000 a year in health costs, year after |
| with the funding of the HSAs tending to become | | | | year. |
| more and more a personal responsibility. | | | | - People with a family history of major illness or |
| The consumer-driven part of the consumer-driven | | | | disease. |
| healthcare is that consumers now will control | | | | - Families who are planning a family and expect |
| which medical services they choose to spend their | | | | multiple trips to birthing center or delivery rooms. |
| money on. HSAs plus high deductible policy results | | | | - Lower income individuals and families, who do |
| in individuals and families, SELF INSURING the | | | | not qualify for government provided health |
| majority of their medical costs. With deductibles | | | | insurance such as Medicaid. Health insurance can |
| this high, statistically, 80-90% of consumers | | | | be as much as 30% of their take home pay. The |
| annually will have less than $5,000 in expenses to | | | | RISK for these people is inappropriately high, to |
| meet the deductible. | | | | self insure. |
| This puts HSA participants in complete control of | | | | - People who have already had a major illness, |
| their healthcare consumption nine years out of | | | | and while they may be healthy now, will never |
| ten. This is GREAT NEWS for the following types | | | | again qualify for NEW insurance with low |
| of medical consumers, all of whom will tend to be | | | | deductibles and co-pays, should usually keep what |
| attracted to HSAs and high deductible insurance. | | | | they currently have. |
| HSAs plus High Deductible Medical Plans tend to be | | | | - People who are covered by COBRA, may |
| a good fit for: | | | | choose to keep their coverage to protect |
| - Healthy consumers and young families with no | | | | insurability as well. |
| chronic diseases, who may have a check up or | | | | Regardless, it will be offered by many employers |
| well baby visit, or an occasional scrape or | | | | and it will mean doctors and other healthcare |
| accidental injury, a mammogram or prostate | | | | providers will have to be more aware of |
| exam. | | | | customer satisfaction, or risk, lost patients. |
| - People with high paying jobs or businesses, will | | | | |