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Where is CDHP Going (Workshop)
Session 54

Moderator: Lawrence J. (Mac) McCarthy, Mercer
Presenters: Lawrence J. (Mac) McCarthy, Mercer; Derek N. Guyton, Mercer
Recorder: Karen A. Shelton, Mercer

This session was an open discussion, led by the panelists on the future of Consumer Directed Health Plans (CDHPs). The discussion was initiated by presenting three potential views on the continued evolution of CDHPs and asking the audience to respond to which scenario they thought was most likely. The potential views presented include (audience responses in parenthesis):

1. CDHPs are the foundation of a new healthcare structure with empowered patients and enlightened providers (8)
2. CDHPs are the latest fad in a series of efforts by employers to exert pressure on providers (10)
3. CDHPs are the last gasp in a dying system (1)

The view of the one individual responding that CDHPs are the last gasp in a dying system is that the government will take over, unions will embrace a non-employer based system and employers will feel relief in not having to manage health care.

Additional views or thoughts from the audience during this discussion included:

• Accountability will increasingly fall to the individual to manage health care with employers providing a defined contribution toward the cost of health care in order to better predict cost. A potential stumbling block to this approach is the level of employee increases in contributions each year in order for the employer to maintain a competitive position in attracting and retaining employees. A move to individual plans may also require tax changes and guaranteed issue for such plans.
• Employers will embrace elements of CDHPs such as the individual accountability, information and wellness, but still want to provide higher levels of coverage.
• The latest fad is to “get everyone healthy.”
• Wellness seems to be a way for an employer to shift accountability to employees by pointing the finger
• Perhaps a shift in the purpose of employer-sponsored health coverage is needed. Should employers provide only true insurance coverage for the unknown or should they continue to cover the preventive and wellness services that are elective, budgetable and benefit more people?
• Consideration around how to best drive participation in wellness, disease management and preventive programs is needed. Are incentives such as contributions to HSAs and free preventive care required? What about incentives for those already “doing the right thing,” since this is not provided by many employers? Who really saves from these programs, particularly if there is job movement? Employers could offer a lower deductible or higher coinsurance rather than cash incentives for those who are “doing the right thing.”
• Half the US population is self-employed or works for small employers who do not provide insurance. We can’t address the health care system by just focusing on health coverage provided by employers.
• Is it possible for healthcare to become purely market-driven? “Wal-Mart” and “Niemann Marcus” health plans may be able to co-exist and encourage consumerism. Minimum standards of care would have to be in place in order for such an approach to work. Evidence of success for market-driven approaches in the medical arena includes LASIK surgery, which has become much more widespread, is cost-effective and is continually improving.
• There are some foundational differences between health care and consumer products that make it difficult for health care to become market-driven. Such differences include:
   
  - The individual is impaired with regard to information
  - Information on the need for care is not available
  - Individuals do not have an impact on price negotiation
  - If my new TV breaks down I can return it for a refund; if my surgery doesn’t work, it costs more money to get it fixed.
   
• One audience member commented that, as a participant in a CDH plan, he now spent more time planning and worrying about the adequacy of health coverage for his family, which is not a good use of his time. However, many advocates of CDH would argue that this is exactly the type of behavior change that is needed in the US health care system.

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