CDH – Shifting Behavior Rather Than Costs

Since the “birth” of so called Consumer Driven Health Plans (CDHP) in the mid 90’s, opponents have argued that CDHP’s merely shift health care related costs from employer to employee. This is simply not the case, and health insurer/administrator Cigna’s eighth annual “Choice Fund Experience Study” offers quite the opposing view, buttressed by empirically derived facts.  Over the course of CDH’s evolution, I have learned a great deal from many of the pioneers and trailblazers of CDH, including the “father of HSAs” (John Goodman), “Mr. HSA” (Roy Ramthun), and the “Godmother of CDH” (Regina Herzlinger).  And studies like Cigna’s provide sound data and efficacy to once again advance the fact that CDH LOWERS HEATH CARE COSTS without sacrificing care or coverage!

The study compares actual claims experience from 3.6 million Cigna customers enrolled in CDH, traditional PPO, and HMO health plans.  To access a summary of findings, click here –
Here are some interesting, if not compelling highlights…

  • CDH members:
    • are more likely to “own” their health and health spending, indicated by greater use of health improvement programs, compliance with evidence-based medicine, and lower health risks, which combined, improved total medical expenses by 12%.
    • were nearly 50% more likely to complete a health risk assessment.
    • with chronic illness were up to 41% more likely to participate in disease management programs.
    • were 82% more likely to log in to a web portal to manage their benefits, and access cost, care quality, and procedure information .
    • showed a greater tendency to register to use the web portal (75%).
    • had nearly 4% lower pharmacy costs.
    • experienced a 5% decrease in use of emergency room services.
  • One large employer saw its use of generic prescription drugs increase from 73% to 81%.
  • Employers that fully transitioned to only a CDHP had 14% more low-risk individuals; and 28% fewer high-risk individuals, compared to customers enrolled in traditional plans.
  • CDHP medical cost trend was 12% lower than traditional plans during the 1st year; and  demonstrated cumulative savings of $7,900 per employee over 5 years.
  • Cigna customers with a Health Reimbursement Arrangement (HRA) paid 21 cents out of every health care dollar, while traditional plan customers paid 24 cents.
  • Cigna has experienced an annual growth rate in CDH enrollment of 24% since 2008; and currently provides CDH coverage to 2.6 million Americans.

As Dr. Regina Herzlinger (aka the Godmother of CDH) has said, CDH consists of “3 C’s” – Cash…Care…and Coverage.  And when these 3 C’s are properly aligned, it presents a win/win/win scenario for patient/provider/payer.  I am both proud and excited to share these findings with readers and stakeholders, and pledge to continue to speak, write, and advocate on the topic of CONSUMERISM in HEALTH CARE!