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May 08, 2006
Making Consumerism in Health Benefits Work

By Sean Dean, Associate Editor

Employers should be patient as they move to consumerism in health plans because changing employee behavior takes time, said Joseph Abraham, vice president of compensation, benefits, and support services at Domino's Pizza.

At WorldatWork's Total Rewards Conference & Exhibition in Anaheim, California, Abraham and Michael Showalter, vice president of consumerism at CIGNA HealthCare, said that if employers are patient with consumerism, they should see positive results.

Showalter started the presentation by defining consumerism as the promotion of the healthcare consumer's interests. He said that under the traditional healthcare model, demand for healthcare services was disconnected from consequences. He said that consumerism enables employees to achieve their personal health goals.

He said that when consumers have the motivation and ability to make better decisions, they avoid unnecessary, unsafe, or overpriced medical treatment; remove cost from the system; and increase their satisfaction with health benefits. He added that consumerism also provides individuals with convenience and a meaningful choice, such as customized benefits and self-service.

Abraham said that Domino's started on the path toward consumerism in 2002. In moving to consumerism, the company wanted to maintain ease of entry into its health plan, incent behavior change, promote awareness of the value of health benefits, and focus on health management among its employees.

He said that the company prompted behavior change by reducing its prescription drug coverage when a generic is available, reducing the level of the out-of-network benefit, promoted urgent care alternatives to the emergency room when there wasn't a true emergency, and provided an incentive for completion of a health-risk assessment.

Abraham said the health-risk assessment helped engage employees about their health. For an incentive, Domino's offered employees a $5 biweekly payroll reduction of their medical premium for the assessment. Before the incentive, 5 percent of employees completed the assessment. After the company started the incentive, 25 percent of employees completed it, Abraham said.

In promoting awareness of the value of the company's benefits, the company integrated health benefits into its total rewards brand and provided employees with annual statements about how much health benefits contribute to the package, Abraham said. The company also moved from a co-pay for prescriptions to a co-insurance for prescriptions.

In addition, the company held sessions to explain benefits to employees and also educated employees about tools that they can use to conduct cost/quality comparisons related to health benefits, such as generic drugs versus brand-name drugs. Another element of the awareness strategy was creating a $400 wellness allowance for employees to use on things like flu shots and mammograms.

In focusing on health management, the company implemented disease-management and clinical-management programs and launched a national wellness education campaign. The company also focused on decision support, such as a 24-hour nurse line and education, Abraham said.

Abraham said the move toward consumerism has had many positive results, such as reduced emergency room visits per 1,000 employees and increased use of generic drugs. However, one negative trend the company noticed was that the number of prescription drug claims incurred per enrolled employee continued to rise from 2002 to 2005, which is one reason why the company went to a co-insurance model for prescriptions drugs, He said.

He recommended that companies looking to move to a consumerism model sell the vision to employees first. He also suggested that companies build trust among employees by having an open discussion about the high cost of medical benefits.

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