Maternity Care and Consumer-Driven Health Plans, Case Study Example

Introduction

Consumer driven health plans are also known as third tier health insurance plans. They allow individuals the opportunity to make medical payments using accounts or other forms of disbursements to their companies. The insured takes routine checkups,  for which are paid through their company. Essentially, claims are paid through a consumer controlled account. This means that patients/ clients have more control pertaining to what they can budget for in the healthcare marketplace. For example, if certain drugs cost a very high price through consumer driven health plans the client could ask for alternatives that would be less expensive (Goodman, 2006).

Development

 General background on the plans

 More importantly, there are a number of subsidiary plans to protect patients from exploitation. They include health savings accounts (HSAs), Health Reimbursement Accounts (HRAs), or similar medical payment products. These products provide routine direct health payments. Other high-deductible health plan (HDHP) does protect patients from enormous medical expenses, but not in the unique way consumer driven health plans are designed to do. In the consumer driven model customers also known as patients and clients have access to the decision making process of their care with regards to payment options (Goodman, 2006).

A recent McKinsey study revealed that patients with consumer driven health plans were twice more likely than those utilizing traditional health care plans to inquire about cost of their care. Besides, they were three times more likely to select a less expensive plan due to their involvement in the decision making process. Also, patients with chronic diseases such as diabetes, hypertension and heart conditions were 20% more likely to carefully follow treatment regimes than those enrolled in traditional plans. This is important since the less likely patients are to follow treatment regimes the more they will become sick and have to see a doctor. This behavior raises health care costs (Goodman, 2006).

Experiences of others who have used consumer- driven health plans

Due to the efficacy of the product Consumer-driven health care was awarded an incentive boost 2003 throughout the US.  Federal legislation was passed offered tax incentives for persons who selected CDHC plans. Authorities in favor of interventions offered in these plans contend that ultimately health care costs will be immensely reduced.  It also means that many Americans if CDHC plans are used.  Definitely, the monthly premiums will be lower (Goodman, 2006).

To a greater advantage for every client by utilizing HSAs and other products increases the free-market variables such as network providers and specialist access products within the health care system. Simply, these additional interactions enhance the competitive nature in health care delivery within a country.  Competition lowers prices since more services are available for customers’ usage. More services automatically lower prices and forces quality of care improvement (Goodman, 2006).

 So far consumer satisfaction  shows a balance between clients ‘for’ and’ against,’ has been received, but there is more pronounced leading towards ‘for.’ Some arguments have been while the plans would ultimately lower costs they are no specific provisions for quality improvement. More so, a Kaiser Family Foundation study revealed that consumer-driven health also plans cover pregnancy unlike other plans. However, extensive costs variations in cost sharing existed.  Consequently, pregnant women were exposed to huge out-of-pocket expenses especially, if complications developed (Kaiser Family Foundation, 2007).

One case study revealed scenario, a pregnancy complicated by gestational diabetes, Caesarean section, pre-term labor, and neonatal intensive care, could cost a mother cost $287,000. However, it was found that when a consumer-directed health plans is used, it reduces the total costs per the family by $6,000 in comparison to traditional plans. Currently, consumer driven health plans are offered as group coverage. Provisions for an individual model have not been designed as yet even though policy makers are considering taking up this venture (Kaiser Family Foundation, 2007).

Group Health Insurance Policy- shared risks

The Group Health Insurance Policy should have premiums based on the group’s shared risks. When this model is adopted members of the group pay one premium, which is spread across to all employees equally. The benefit of shared-risk policy to employees is that hise with chronic diseases would not have the additional burden of a higher premium. While it may appear that this is unfair to those who do not have chronic diseases, the ratio of chronic diseases to ordinary employees with no health issues would be small. Therefore, allowing the company to use a shared risk program is helping the employee to function better supported by the group. His/her services would be enhanced though coverage that is affordable (Newhouse, 2004).

Conclusions

Based on the foregoing benefits expressed regarding consumer driven plans it is my opinion that the company should not charge individuals different premiums based on each individual’s risk?  Sure, the persons to benefit would be those with chronic diseases. If a variance exists it would depend on the number of high risks employees in the company and this should be minimal It may be necessary to adopt this group risk philosophy for benefit of retaining employees. No one would really be harmed, but person with a low risk may feel abused by the policy.

References

Goodman, C. (2006). Consumer Driven Health Care. Networks Financial Institute Policy Brief, Indiana State University

Kaiser Family Foundation (2007).Maternity care and consumer-driven health plans. Kaiser  Family Foundation

Newhouse J. (2004). Consumer-directed health plans and the RAND Health Insurance Experiment. Health Affairs (Project Hope) 23 (6): 107–13