Towers Perrin
May 22, 2007
Despite the short-term financial savings achieved by some employers, new Towers Perrin research shows that the long-term effectiveness of account-based health plans (ABHPs), or “consumer-driven health plans,” may be in question.
According to the newly released 2007 Towers Perrin Study on Account-Based Health Plans, employers and employees are not reaping ABHPs’ full rewards. Employees currently enrolled in ABHPs are significantly less satisfied with many elements of the health benefit plan compared to those enrolled in traditional health benefit plans. And efforts by employers and health plans to date have not strengthened employeesĆ¢ā¬ā¢ confidence and competence as health care consumers.
According to the Towers Perrin survey, while 29% try to reserve account money for future financial protection, and 16% use the ABHP to save for health care expenses in retirement, the majority of participants have yet to fully-appreciate the value of this opportunity.
“Contrary to the designed purpose of ABHPs, employees do not appreciate the long-term potential these savings accounts hold and remain mired in the old ‘use it or lose i” mentality of flexible spending accounts,” commented (Dave Guilmette, Managing Director of Towers Perrin’s Health and Welfare practice). “If this perception is not changed quickly, employees will be missing out on a critical benefit, and the intended financial incentives will not work correctly.”
Comment:
By Don McCanne, MD
Who’s confused here?
Health savings accounts or HSAs (which Towers Perrin refers to as account-based health plans or ABHPs) have been promoted as a substitute for first dollar insurance coverage, theoretically reducing health care spending by requiring patients to use their own funds more wisely for up-front costs.
Although Towers Perrin notes “short-term financial savings achieved by some employers,” other studies indicate that the savings are not due to careful health care shopping by informed consumers, but are rather due to the employers’ shift to lower-premium high-deductible plans. In many instances the employees’ HSAs are not even funded.
According to Towers Perrin, the “designed purpose of ABHPs” is “to reserve account money for future financial protection” and “to save for health care expenses in retirement.” Towers Perrin contends that employees should no longer be “mired” in the “old mentality” of using designated health care accounts for current health care needs. It is understandable how this can be confusing to some.
Towers Perrin states that the future of ABHPs may be in question if employers do not clear up this alleged confusion on the part of their employees. It is much more likely that Towers Perrin is confused if they really believe that gaining support for ABHPs is merely a matter of employee education. In reality, the employees are not confused. They understand the effort to con them through this ABHP snow job, and they don’t like it.
Of employees who are not comfortable with their ABHPs, only 28% have a positive overall view of the company; only 24% intend to stay at the organization; only 21% have a personal commitment and motivation to do a good job for the organization; and only 20% have trust in the management. There’s not much confusion here.