Real Cost Reduction

1
Real Cost Reduction Positive Behavior Change
with CDHPs
Presented by Robert Hughes
2
Health Insurance Premiums

Employers carry most of the burden of higher
health insurance premiums
Average Annual Premium Contribution for Family
Coverage
12,680
12,106
11,480
10,880
9,950
Note Coverage is for a family of four. Source
Calculated based on Employer Health Benefits
2008 Annual Survey, (7790), The Henry J. Kaiser
Family Foundation and Health Research and
Educational Trust, September 2008
3
CDHP Offer and Uptake Rates
Growth is being driven by increased employer and
health plan offerings of CDHP products
Percentage of ConsumersOffered a CDHP Option
CDHP Uptake for Consumerswith a Choice of a CDHP
Product
HRA
HSA-eligible
Sources 2005, 2007 and 2008 BCBSA CDHP Member
Experience Surveys
4
CDHP Demographics
CDHP members increasingly mirror non-CDHP
population
Age Distribution
Income Distribution
HSA-eligible
Non-CDHP
HSA-eligible
Non-CDHP
18-29
30-44
45-54
55-64
Sources 2005, 2007 and 2008 BCBSA CDHP Member
Experience Surveys
5
Healthcare Utilization
HSA-eligible enrollees use more preventive
services, and their use of necessary care mirrors
non-CDHP population
Healthcare Utilization
Percentage of Enrollees
Statistically different from non-CDHP results
at a 95 confidence level Sources 2008 BCBSA
CDHP Member Experience Survey
6
Healthcare Utilization Study
Savings due to reduced utilization are observed
in CDHPs, however, CDHP enrollees are not
foregoing needed care
Savings Due toReduced Utilization
Member Healthcare Compliance
Chronic Compliance
Preventive Compliance
Full Replacement
Choice
Full Replacement
Choice
Statistically different from Traditional PPO -
Choice results at a 95 confidence level
Statistically different from Traditional PPO
Full Replacement results at a 95 confidence
level Note CDHC study population restricted to a
subset of 1,364 members from an original CDHC
enrollment base of 57,365 members in
2006 Sources Blue Cross Blue Shield of
Tennessee, CDHC Impact on Utilization, Costs,
Quality, June 2008
7
Cost-Sensitive Behaviors
HSA-eligible consumers more cost-conscious and
cost-driven
Behaviors Considered Because of Cost
Percentage of Enrollees
Statistically different from non-CDHP without
Account results at a 95 confidence
level Sources 2008 BCBSA CDHP Member Experience
Survey
8
Health and Wellness
HSA-eligible enrollees more engaged in health and
wellness
Participation in Health or Wellness Programs if
Offered
Percentage of Enrollees
Statistically different from HSA-eligible
results at a 95 confidence level Note
Participation among those offered health or
wellness program Sources 2008 BCBSA CDHP Member
Experience Survey
9
Employer Costs
Employers are realizing savings in CDHPs
Average Employer Cost per Employee
Note Due to the declining enrollment in POS
plans, PPOs and POS plans were treated as one
plan type in the 2008 survey. Source Mercer
(2008) National Survey of Employer-Sponsored
Health Plans
10
Plan Design
11
Cost Trend Comparison
12
Participant Characteristics

• Enrollment averaged 20 for first year plans in
  2004 and 2005
• Enrollment averages 35 for first year plans now
• Average enrollment over 40 and plans in third
  year nearly 45

13
Education Plan Design is Key to Success

• Begin with focus groups to educate small groups
• Use newsletters and payroll stuffers to focus on
  benefits of HSA
• Educate with words and pictures in employee
  meetings and employee enrollment packet
• Provide one-on-one counseling to assist people in
  choosing the right plan
• Making a plan choice is a consumer function
• It is only a one year decisionnot a lifetime
  decision!