SCHWARTZ HEALTHCARE-IT BLOG

Bridging CDH Islands

This week I wanted to share an interesting column on consumer directed healthcare. Benefitfocus CEO Shawn Jenkins wrote in Health-IT World an insightful piece on overcoming the data challenges to make CDH a reality.

Integration: The Key to Bridging CDH Islands
By Shawn Jenkins

Consumerism is the biggest trend in healthcare in 30 years, as the combined forces of federal and state government, the private sector, and consumer advocacy groups call for greater healthcare transparency and cost control. CDH [spell out – does it stand for consumer-directed health?] plans offer patients more flexibility in selecting doctors; large networks; and financial control over their healthcare. For employers, CDH plans reduce premium rates and annual cost increases but are complex to design and administer.

But what will it take to make CDH a reality?

Consider this vision of an integrated CDH portal: An expectant mother, uncertain and nervous of her many health options, uses a CDH portal to obtain the best information to make choices. An integrated portal should show which insurance plan is best for her family's care, the best local labor and delivery hospitals, compare nearby pediatricians, and offer immediate advice on financial planning and spending. Her employer, health plan, and doctor communicate electronically, thereby improving care while reducing costs.

It's not just a consumer benefit. Providers also benefit from an integrated CDH platform. As consumers spend their health savings account monies, the portion of provider revenue base that depends on direct patient collection will grow. However, most hospitals aren't prepared. Beyond the monetary aspect, hospitals are grappling with if and how to release pricing information to the public, or quality data with payers as part of pay-for-performance. needs clarification

The key to successful CDH is the integration of disparate systems and islands of information to enable self-service to consumers and to benefit administrators. What exactly is the integration challenge? A primary difficulty in supporting a CDH portal is that each product is administered by a separate business entity with only one part of the overall product picture. Consumers will need to track claims records, claims payments, deductibles, funding and expenditures, but no single party has a window through which to view all financial information in its entirety.

These challenges have slowed adoption and caused doubt among employers and consumers, as reflected in a recent 2006 survey by The National Association of Health Underwriters. While 41 percent of respondents claim that employers rate CDH plans as the best way to impact medical costs, only 29 percent of employers are planning to offer them in the next year -- representing flat year-over-year growth. Eighty-five percent of respondents cited "enrollment communication and support" as the main barrier to offering these plans. Employers, especially those larger in size, expect certain capabilities in their plan, such as online tools, a single access point, and provider cost comparison. Eighty-five percent of respondents do not feel that many consumer-directed health plans adequately provide these tools.

The Health – Wealth Challenge

Add to this the additional burden managing a health savings account (HSA) and potentially sophisticated investment options. How the consumer manages or mismanages his healthcare finances could have long-range implications in later years when the monies are needed most.

HSAs are the new 401(k). Following the trajectory of 401(k)s in financial services, industry leaders expect very slow initial adoption, followed by heavy consumer education efforts, further adoption by white collar workers, and eventual broad adoption over 10-15 years.

Due to the growth of HSAs, banks are beginning to play a big part in CDH. The HSA introduces banks to a new set of challenges: supporting and integrating with health carriers and providers and their customer support services. Health plans will likely deal with many different HSA banks; reusable back-end claims processing and payment systems are a must for a viable integrated platform.

According to market research firm Forrester, in a truly integrated platform, the consumer sees the health plan and HSA administrator as one entity. The CDH portal stitches together health plans and banks to allow payment transactions, enrollment and business processes, online account management, and decision support.

A number of key interfaces must integrate to provide a comprehensive CDH support solution: 1) enrollment, renewals, and consumer maintenance; 2) personal health and wellness; 3) personal healthcare finance planning and management; 4) provider payment authorization and payment events. The smart health plan and employer groups are building on the administrative functions of a CDH portal to include disease and care management for consumers. CDH portals will continue to add new levels of interactivity and personalization.

CDH has the potential to deliver smarter and cheaper healthcare, but only if the wealth of data held hostage in health plans, providers and other third parties are brought together. Years of mistrust between insurers and providers must be overcome. Hand-in-hand with information technology is a shift in mentality. Doctors can't be insulted if consumers ask questions, compare, and shop. Health plans should view their role as more health advisor than cost container. Consumers can only empowered through knowledge.

Posted by Shawn Whalen on October 5, 2006 at 2:53 PM
Comments (0) | TrackBack (0)