Future Trends - One Experts Future View of Health Care Benefits
by Angie Rightnowar
When it comes to the future of health care, there is ample room for improvement in value, according to Ian Morrison, an internationally known futurist, author and health care consultant.
Morrison defines “value” as access plus quality divided by cost. “Unfortunately, we’re not doing so well on access and cost; and quality remains difficult to measure,” he said. According to Morrison, 51% of consumers currently have access to adequate tools for informed health care decision making. Only 24% use the tools available, and only half of those considered the tools available to be helpful.
As cost-shifting continues, Morrison predicts that “pay for performance,” with open exchange of performance and quality information, will emerge as a positive change in the health care industry. Said Morrison, “In five years, it is likely that an estimated 63% of consumers will use quality ratings when selecting a health plan, and 59% will use them when selecting a hospital.”
Morrison made his comments at the recent third annual futureFOCUS seminar, titled “The Changing World of Healthcare Benefits.” The event was sponsored by Delta Dental of Missouri. The annual conference is designed to provide benefit managers, executives and producers with a window on the future of health benefits. As the keynote speaker, Morrison shared his views on the future of health benefits.
Morrison specializes in long-term forecasting with emphasis on health care and the changing business environment, and he sees many changes ahead that will dramatically impact future health care plans. The following are a few of the trends he described:
** More tiering in health care benefits plans. Consumers will be able to have whatever benefits they want, but they will have to pay for upgrades out-of-pocket. As an example, he pointed to the recent changes in Medicare, which allow for cataract surgery as an optional, add-on benefit.
** Public demand for greater regulation in the health care industry. He cites recent studies that show managed care, health insurance and pharmaceutical are the industries the public considers to be the least honest and trustworthy and most in need of greater regulation.
** Health benefits as a percentage of total compensation will continue to increase. Morrison predicts an increase from an estimated 19% in 2003 to 63% in 2021, if current trends continue. These projections are based, in part, on the fact that annual growth in household income is projected to grow at 4.6% per year, while health care premiums are projected to grow at a rate of 12% annually.
** The best in health care will be unaffordable for many Americans. Morrison commented that America’s health care system is at risk of going the way of the Concorde jet—with high cost, high efficiency and high custom-ization available, but unaffordable for the masses.
** Costs will become more transparent to the consumer. He commented that pricing has historically been more transparent in the dental industry than in medical, with patients more aware of the full cost of procedures, such as crowns or braces. He predicted that medical costs would become more transparent in the future. He added that the shift to consumer-directed health care plans will require better information for consumers on price and quality so that they can make more informed decisions.
** Consumer directed health care plans, such as Health Savings Accounts (HSAs), will increase in popularity. Morrison predicted they will grow slowly to about 24% of the market in 2010, and will drive the entire health care insurance market toward high-deductible plan options.
Morrison noted as high deductible health plans become more mainstream, it’s important to recognize recent experience suggests more treatment compliance problems among members of these plans. Members with high deductible insurance are almost twice as likely to skip a doctor’s visit, taking a prescribed medication or filling a prescription. He added that they are also less likely to follow up on recommended treatment or get annual check-ups to save money. He commented that high- deductible plans may disproportionately attract healthier and more affluent consumers.
He also cited research indicating that high deductible plan members trade down twice as often as they trade up and often use generic and therapeutic substitution. Based on this and other research, he suggested that with the rise of high deductible plans, the poor and chronically ill will be the most adversely affected, resulting in potentially harmful health results, similar to the impact of being without insurance.
Morrison described four alternate possible future scenarios for health care.
** Tiers R’ Us centers around what Morrison describes at the SUVing of American health care, where we pay more for choice and control.
** Bigger Government By Request relies on a major backlash against cost shifting to consumers.
** Market Nirvana Or Market Meltdown creates a scenario where the culture of entitlement is broken and consumers learn to discriminate and pay.
** National Rational Health Care in which there is a complete redesign of the delivery system involving evidence-based floors and ceilings, and pay for performance.
Morrison suggested that the manner in which employers and consumers respond to today’s challenges will dictate which scenario emerges, and he expressed his desire to establish a health care floor below which no American falls and a health care system in which people have the option of trading up.
Morrison also commented on tactics in health care management that could make a positive impact immediately. “We must look at the degree to which preventive care is covered, and also consider earned benefits and incentives for personal health management, such as lower premiums for those who sign up for weight loss programs or disease management programs in order to improve their health,” he noted.
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