The Love-Hate Relationship with HDHP-HSAs

September 19, 2017 Ruth Hunt

Freshly enrolled in a health plan with a Health Savings Account (HSA) several years ago, I realized I had my annual winter sinus infection. To be a good consumer, I visited a nearby retail clinic where the nurse practitioner confirmed my self-diagnosis. As she started to write a prescription, I asked about the antibiotic she chose and the price. “Don’t worry,” she replied, “Your copay will take care of it.” I answered that I had a high deductible health plan (HDHP) and so would have to pay the full cost. “Oh, you have one of THOSE plans,” she responded, and opened a thick binder to discuss choices.

Fast forward to my decision to have sinus surgery, for which I needed a scan. After several phone calls, I learned the scan would be almost $1,000 through my clinic. A highly rated imaging center quoted $450. I did the math, confirmed no difference in quality, and chose the latter.

“…healthcare cannot be a spectator sport. Gone are the days when patients could be passive – there’s simply too much at stake.” Ruth Hunt, Principal, Engagement Practice

HDHPs with HSAs were designed to trigger better patient engagement in healthcare decisions like these. Multiplied many times over and often involving much more costly treatments and procedures, the goal is to save on costs and enhance quality outcomes as a result of the personal stake in managing one’s health and risks (seeking regular preventive care for early detection, remaining compliant with treatment, etc.) and in making informed decisions at each encounter with the healthcare system. Many studies report success in reducing unnecessary care and costs. Yet others cite examples of care avoidance, especially by those least able to afford the cost sharing.

Growth Slower, But Plans Still Popular

EBRI reported in July, 2017, that 61% of larger employers (with 500 or more employees) offered an HSA-eligible plan in 2016, while other sources expect 72% to do so by 2019. And while some companies have turned to a full-replacement strategy, PwC data suggests that trend may be slowing, in favor of continued choice. No doubt the improving economy’s corresponding talent recruitment challenges, combined with employers’ better business climate, have contributed to a slowdown in the rapid growth of HDHPs. Still, the support for these plans in Washington, coupled with businesses’ need to keep a lid on health costs for competitive reasons, ensures that HDHPs with HSAs will remain highly popular with plan sponsors.

Effective Communication is Vital

In turn, we must confirm what works to effectively communicate these plans. Conduent’s stakeholder research with employees through focus groups and surveys shows divided opinions. The young and healthy and the mid-career who are looking for tax advantages to fund future retiree medical costs appreciate the lower premiums and/or the opportunity to accumulate resources for the future, including retirement. As a financial advisor remarked to me, “Triple tax-advantaged HSAs are the eighth financial wonder of the world!” In contrast, those with chronic conditions or significant health events yearn for the days of a simple, straightforward copay, while the lowest paid in a workforce may feel they must choose between living expenses and needed medications or treatments.

There’s no pleasing everyone. Still, healthcare cannot be a spectator sport. Gone are the days when patients could be passive – there’s simply too much at stake. Employees need to actively learn about and manage their health risks, and make informed decisions in using the healthcare system.

Many say that’s impossible due to the complexities of healthcare, and that the moment a major event occurs the patient may be likely to “blow through” the deductible and even the out-of-pocket maximum, which in turn means the plan can bear almost unlimited costs thereafter.

No Need to Become Medical Experts

The complexities of our often-dysfunctional healthcare system need not victimize the patient if employers support these “consumer-driven” health plans (CDHPs) with key investments – in education, cost and quality decision-support tools, and advocacy to help with navigating the confusing system.

Without correlating resources, poorly managed plans are nothing more than a cost shift, with the lowest socioeconomic groups too often paying the highest price in insufficient or inappropriate care, as demonstrated by Conduent experience showing much lower use of preventive care services (despite being free) and higher use of inappropriate channels such as emergency room services.

To achieve informed consumerism, employers must recognize that employees can’t be expected to become medical system experts. Today’s high-stress lifestyles leave little time and mindshare to do so. Likewise, information provided at the time such plans were rolled out isn’t reasonably retained when an adverse event occurs many months or years later. That’s where online resources and an advocacy partner can help, just in time when the need and motivation are the greatest, to guide the employee in making informed decisions. The result can be reduced costs attributable to unnecessary care or defensive medicine.

Remove Barriers

In addition, employers can remove barriers to needed care in many ways, including:

  • Lower premiums and/or higher HSA contributions for lower-wage workers
  • Choice between non-CDHP and CDHP plan designs
  • Supplemental medical options (accident, critical illness and hospital insurance) for those who desire more protection
  • On-site resources ranging from screening events to flu shots to more wellness visits and even more extensive types of care
  • Healthy choices as the easy choices, such as better-for-you cafeteria options at lower prices
  • A balance between only “pull” communications that the employee needs to take the effort to find, and engaging, easy-to-use “push” communications to seek out teachable moments
  • Greater personalization and relevance so the tobacco user gets what he needs and the newly expectant mom connects to maternity care guidance, or the pre-diabetic can learn ways to prevent full-blown diabetes while those with chronic conditions understand ways to best manage their ongoing care
  • Ongoing education – not just at initial rollout or annual enrollment – to capture teachable moments

High deductible plans need not merely shift costs or drive avoidance of needed care. And “those plans” need not be viewed negatively if the right investment is made by the sponsor. When well designed and communicated, these options can be of great benefit to the employer and employee.

The results of this investment in health can boost employees’ physical, mental and financial wellbeing while employers enjoy better-managed healthcare costs and a more engaged and productive workforce.



About the Author

Ruth Hunt

Principal, Engagement Practice

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