|
We’ve written in these pages about our commitment to three ideas that guide the transformation of our company: choice, independence and transparency. We believe that by giving people more options, respecting their preferences and giving them more information to make well-informed decisions, we will be able to reduce costs and increase consumer satisfaction. For our new generation of products, we had two big ideas about how choice and independence could reduce costs. On the one hand, tax laws subsidize the purchase of insurance through the workplace, so a dollar of health coverage is not as expensive as a dollar that comes out of your pocketbook. This encourages people to choose more costly coverage than they actually need. We believed that by giving people more choices in their insurance, they could choose the benefit bundle that best suits their style and stage of life — expecting some to choose less coverage and lower premiums in exchange for higher copayments and deductibles, which results in lower costs overall. Second, insurance plans reduce the costs of services to its members. Consequently, many people have no idea what health care services really cost — a doctor’s visit is $10, a prescription $5 — because the true costs are hidden from them. We believed that by creatively structuring what we call “intelligent cost-sharing” underneath solid protection from financial losses, we could heighten consumer sensitivity to the costs of services so they would choose care more prudently. As an employer of nearly 12,000 people nationwide, we were facing the same high medical-cost trends as our business customers. We gave our employees more choices, eliminated a lot of the insurance jargon and created educational tools to use so they could understand the financial consequences of their benefits. Some of our employees even received completely customizable benefits. We now have compelling evidence from our own experience that consumer engagement strategies are an effective way to influence medical spending without causing employees to feel that anything is being taken away. The choices are theirs. And we have learned that people are much more likely to be satisfied with their choices when they’re the ones making them. The results have been nothing short of spectacular. Employee expenses rose at a modest 3 to 4 percent, compared with 17 to 18 percent market trends — representing nationwide savings of $7.5 million, or 12 percent less than we had anticipated. Some people chose less coverage. Others changed the kinds of services they used — more physician visits and medications in exchange for fewer emergency room visits, for example. In trying these new initiatives, our employees have become co-developers of a whole new world of health insurance. So far, they seem to like what they’ve created. Sincerely,
Jack Lord, M.D. |
 |
 |
 |
 |
 |
 |
