Results For Consumer-Driven Plans Getting Clearer

Destiny Health, Oak Brook, Ill., a company that focuses on replacing entire health plans at small and midsize employers, covers 30,000 workers, up from 5,000 workers 2 years ago.

The sponsors of its plans contribute $600 to a health account for each single employee, $1,050 for an employee with one dependent, and $1,500 for a family.

The program also offers rich preventive care benefits and perks such as airline miles and health club discounts for workers who get recommended preventive care, according to Stuart Slutzky, the senior director at Destinys actuarial division.

Destinys small group rates increased 14% in 2003, but 79% of plan members got the recommended preventive care, compared with an average of about 50% to 60% at the typical traditional plan. Generic drugs ended up accounting for 50% of prescriptions, up from 30% when the employees belonged to conventional plans, Slutzky says.

Destiny believes that in a few years it will bring about big changes in cost trends by making long-term changes in patients behavior. "Were looking forward to the future," Slutzky says.

Definity Health Corp., Minneapolis, is reporting that care for its 200,000 account-based plan members is costing about $392.50 per employee per month, or 4.5% less than the projected cost, according to Dave Delahanty, a consultant in the Minneapolis office of Mellon Human Resources & Investor Solutions.

At Lumenos Inc., Alexandria, Va., costs at 7 plans ranged from 64% of the projected level to 122% of the projected level, with a median of about 90%, Delahanty says.

Benefits managers at many of the employers that have adopted the account-based plans are getting used to reporters and consultants calling up to ask them how the plans are doing.

At Belo Corp., Dallas, a media company, 5.5% of the 8,000 eligible employees have signed up for the self-funded Lumenos plan, up from 3% a year ago, says Joe Daume, the companys human resources director.

The demographics of the plan seem to be similar to those for the Belo self-funded preferred provider, self-funded point-of-service plan and insured health maintenance organization plans, Daume says. "If people understand the [Lumenos] plan, they really like it," he says.

Daume declines to give exact medical cost figures, but he said the medical cost increase at the Lumenos plan was lower than that at the other self-funded plans.

Daume wants to wait to see more data before coming to any conclusions about account-based plans, but he already sees the consumer-driven plan movement improving the Web sites and Web-based tools of traditional plans.

"The competition has forced the other plans to come up to the same level," Daume says.

Milstein and other experts point to several weaknesses in the performance data for account-based plans. One is that the plans are still very new. Claims might be lower than expected partly because employees are still learning how to use the new plans.

Another reason is that the plans might be attracting employees who are different from the employees who stick with traditional plans.

But the third reason, Milstein says, is that, despite all the efforts of the consumer-driven plan companies to give employees more information about the cost and quality of care, employees still have a hard time getting the detailed, reliable cost and quality data.

Reproduced from National Underwriter Life & Health/Financial Services Edition, March 12, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.