More on Desktop Resources (Dec. 2006): Will CDHC affect HMO enrollment?

Price is paramount to survival in the current healthcare market. With skyrocketing premiums, moving toward an affordable level for both the employer and the employee/member is essential, experts agree.

"Many of the traditional cost management solutions have either run their course or are in the late stages of maturity," Brian Dolan, executive vice president of ActiveHealth Management, a health management data analytics company based in New York, says. "That's why innovative strategies such as personal health records, which are supported and driven by decision-support technology, are becoming key differentiating capabilities for all health plans."

At Empire Blue Cross Blue Shield, President Mark Wagar, noted that this year, employers are purchasing products with higher copay levels and/or increasing the employee contribution amount in an effort to control their costs. "We noted that some employers are choosing to move away from open access plans and back to plans that require a gatekeeper in order to take advantage of the cost savings that a gatekeeper provides," Wagar says. "The No. 1 challenge faced by all insurers is how to contain the cost of healthcare premiums when the cost of healthcare services continues to rise."

The 360° Health program is also available through Empire's CDHP products.

THE EFFECT OF HSAs

Using HSAs can further control costs and bring in the consumer-oriented perspective. HSAs will follow the trajectory of 401(k)s in financial services, according to Shawn Jenkins, CEO of Benefitfocus, a provider of CDHC software and services located in Charleston, S.C.

Jenkins predicts that there will be very slow adoption followed by education efforts, then early adoption by white-collar workers, and eventually broad adoption by 10 years.

"Eventually, HSAs will be mandatory," he says. "Health plans ... perceive they will lose HSA business to banks. Luckily for health plans, banks largely don't know how to properly capitalize on the opportunity. Health plans can do a better job, followed next by financial services companies such as Fidelity or Vanguard, then individual banks."

According to Jenkins, CDHC cannot happen without integration. "Integration will bridge the CDHC islands of data healthcare IT that promotes integation and self-service will be a critical element in delivering CDHC," he says. "The technology must support related information that is segregated across multiple systems into one CDHC portal that supports not only consumers but benefit administrators." Jenkins believes that a number of key interfaces must integrate to provide a CDHC solution: