Healthcare managers should prepare for the next wave of cost containment.
Frustrated employers and struggling health insurers are determined that patients should assume greater responsibility for holding down spending and absorbing cost increases. The market manipulation is bound to change consumer behavior and alter traditional patient-provider relationships.
The well-publicized shortcomings of managed care have prompted employers and insurers to promote the attributes of consumer-driven healthcare. They paint a picture of patient empowerment, highlighted by greater flexibility, wider options and more say in decisionmaking. In return for the enhanced influence, patients will be expected to make better, cost-effective decisions.
Employers are helping drive this vision because of a strong desire to reduce their role in health insurance. They are tired of the inflationary spiral in premiums, and they fear increased liability in the way the medical benefit programs are administered.
Business leaders are thus uniting behind the idea of giving workers a stipend to buy health insurance, rather than limiting them to a couple of handpicked insurers. Although the defined contribution model does induce patients to take charge of their healthcare, it also makes it easier for employers to dodge premium hikes and legal problems.
But look on the bright side. Advocates of consumer-driven healthcare are convinced it will reduce utilization and motivate patients to shop around for value the way they do for goods and services that insurance doesn't cover. That will force health plans, hospitals and physicians to compete more aggressively on quality and cost.
Savvy providers should anticipate a day when the posting of rates, bill simplification and public disclosure of medical-performance statistics are considered standard operating procedures.
In the meantime employers will attempt to fend off further medical cost increases by adopting tiered copayment systems for prescription drugs and consolidating health plan choices. Insurers also are getting into the act. Blue Cross and Blue Shield of Michigan, for example, is preparing a $1 million marketing blitz aimed at encouraging the use of generic drugs.
Healthcare cost containment is a work in progress, and providers need to carefully measure the winds of change.