Taking Tradeoffs to the Consumer With an Employee-Designed Health Benefit Package
December 10, 2018
Tradeoffs are a constant part of health care decision-making – especially in employer-sponsored health insurance benefit design – but those tradeoffs are often invisible to those who have the most at stake: the employees. More than half of insured Americans get their health insurance through their employer, making employees an important health care consumer segment. However, too often, it’s only after an employee has fallen ill that he or she recognizes, for better or worse, those tradeoffs.
“What we have not done very well in our country is to incentivize and equip consumers with information about value and about implications about different choices they may be making. In many cases, the insurance product is opaque and hard for them to understand,” said Len M. Nichols, PhD, director, Center for Health Policy Research and Ethics, and professor of Health Policy, George Mason University.
That’s what makes a new case study from Janet McNichol, SPHR, CAE, human resources director, American Speech-Hearing-Language Association (ASHA), along with Nichols, so interesting. She was interested in engaging employees in the design of a health benefit for her 291-employee organization and set up a structured game to allow all employees to weigh the different tradeoffs for themselves and for the organization as a whole.
To help visualize the challenge, each participant was given a game board that categorized various health care services (e.g. maternity, dental, mental health services) as well as poker chips that represented spending on health care in the insurance plan. The participants first had to divide the chips depending on where they individually felt the greatest need: would they emphasize hospital care? Mental health care? Or one of 10 other health benefits?
Then the participants gathered to discuss and allocate the chips as a group, designing a plan based around both individual preferences as well as the needs of the entire organization.
While the decisions the ASHA groups made were interesting on their own – dental services were a low priority, hospital coverage was a high priority, and items such as mental health coverage divided the group – the more critical finding was that 83 percent of those who participated were satisfied with the final plan that had been designed, a relatively high satisfaction rate when compared with other employer-sponsored plans.
“What’s really cool is drawing out how workers make the tradeoff,” said Nichols.
McNichol’s experiment to engage employees in discussions about health care tradeoffs illustrates that consumers and patients are ready to come to terms with the hard reality of the health system: without conscious tradeoffs, cost control is impossible.
Indeed, one of the most meaningful findings from the exercise was that ASHA participants, who had the option of purchasing additional benefits through salary reductions, largely chose not to, and instead made tough decisions about what to cover within the confines of a finite budget. Sometimes, simply understanding tradeoffs is the best way to corral costs.
The research was funded and developed in part with the National Pharmaceutical Council.