Alternative Finances

Promoting Cost-Conscious Healthcare Consumption

Alegeus Technologies, the Waltham-based healthcare and benefit payment solutions provider, has created an infographic that summarizes how the consumer directed healthcare movement is leading to more cost-conscious healthcare consumption, higher degrees of healthcare engagement and a reduction in healthcare spending.

The Infographic, entitled “Understanding the Consumer Directed Healthcare Movement,” provides useful metrics and insight into the market shift that is changing how consumers manage and consume healthcare services in the U.S.

Click here to view full Infographic.

Consumer Directed Healthcare

The premise of Consumer Directed Healthcare is: if consumers are made more accountable for the cost of their healthcare, they will become more responsible healthcare consumers – and overall healthcare costs will decrease.

Rising Healthcare Costs

The rising cost of healthcare in the U.S. has been well documented and is growing at unsustainable rates. Health insurance premiums have outpaced wages and inflation, rising 117 percent since 1998.

As a result, employers – who continue to bear the majority of premium costs in our predominantly “employer-sponsored” U.S. healthcare system – are increasingly adopting new health plan types to reduce premiums and shift more of the cost burden onto their employees in the form of higher deductibles. Sixty-six percent of employers increased employees’ contributions for single-only coverage in 2012, and 73 percent increased employees’ share on plans with dependent coverage.

These so-called consumer directed health plans (CDHPs) combine a deductible greater than $1,250 with tax-advantaged spending accounts, allowing consumers and employers to save pre-tax funds to cover eligible healthcare expenses in health savings accounts (HSAs), flexible spending accounts (FSAs) and Health Reimbursement Arrangements (HRAs) – helping consumers to save and pay for their increased out-of-pocket responsibilities.

Increased Adoption of Consumer Directed Health Plans and Accounts

With more than 25 million consumers now enrolled, CDHPs are gaining significant traction in the market – in 2015, there will be 61.6 million CDH accounts, up 115 percent from 2010 – and the percentage of firms offering only CDHP plans has grown steadily.

Early evidence points to the fact that CDHPs are delivering anticipated results. Relative to those enrolled in traditional health insurance coverage, CDHP enrollees are significantly more likely to exhibit more cost-conscious healthcare consumption and higher degrees of healthcare engagement – for instance, participants are more likely to develop a budget to manage healthcare expenses, check the price of service before getting care, ask for a generic drug instead of a name-brand and talk to their doctors about treatment options.

As a result, CDHPs lead to a 5 percent to 14 percent reduction in healthcare spending.

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