Change Healthcare: When Taking into Consideration Premiums and Out-of-Pocket Expenses, CDHPs Can Save Most Employees Money
91% of Employees with Families and 65% of Employees Overall Would Have Spent Less Under a CDHP than a PPO; Families Averaged $140 Per Month in Savings
BRENTWOOD, Tenn., Dec. 5, 2012 /PRNewswire/ -- Most employees would have saved more in a consumer directed health plan (CDHP) versus a traditional health plan (PPO) without compromising quality or convenience, according to a new white paper by Change Healthcare, the leading healthcare cost transparency and engagement company. On average, members (employees only) could have saved $55 per month in total out-of-pocket costs (premium savings plus co-pays and co-insurance), while families could have saved $140 per month in total costs had they selected a CDHP. Add to the CDHP a cost transparency solution and the average savings increase from 65% to 86%.
The success of CDHPs for plan sponsors is driving more employers to offer them. Over the past two years, offerings of CDHPs have risen from 17% to 22% of all employers. Among jumbo and large employers, the percentages are significantly higher – 59% and 36% respectively.1 However, only 13 percent of employees who have the option are actually enrolled in a CDHP.2
"Many employees fear change and worry that a high-deductible plan will cost them significantly more than a traditional plan. They also lack the tools needed to successfully shop for healthcare services," said Change Healthcare President and CEO Douglas Ghertner. "Our analysis shows that, in fact, CDHPs can help employees control their healthcare costs, while improving their health. In the population we analyzed, 91 percent of employees with families and 65 percent of employees overall would have spent less – when taking into consideration premiums and out-of-pocket expenses – under a CDHP versus a PPO during the plan year."
While high-deductible health plans are largely recognized as a cost reduction strategy for employers that want to cap what they have to pay to insure employees – saving them an average of 20 percent per year – the lower premium for a CDHP can also help employees save throughout the year.3 Change Healthcare's study found that across the population, 10 percent of covered members in the PPO plan had out-of-pocket expenses that alone were equal to or greater than the deductible for the CDHP option.
"A cost transparency and consumer engagement solution can help both employers and employees further optimize CDHPs," Ghertner added. In Change Healthcare's study, when accounting for additional savings opportunities presented by a cost transparency solution, savings potential for members across the entire population increases from $55 to $118 per month, while savings for families increases from $140 to $201 per month.
The data analyzed was sourced from Change Healthcare's proprietary, HIPAA-compliant database generated from client activity. The pricing, demographic data and behavioral content contained in the report is derived from market activity using the company's Transparency Messenger tool.
The full white paper is available at http://www.changehealthcare.com/resources/index.html.
About Change Healthcare
Change Healthcare Corporation (www.changehealthcare.com) launched in 2007 with a mission to engage consumers in obtaining personalized and actionable cost‐savings information that changes the way they purchase healthcare services. Built on a database of medical, dental and pharmacy claims from a national client base, Change Healthcare delivers substantial savings to health plan members and employers. With an average engagement rate over 50 percent, the company's web‐based solution, Transparency Messenger™, is the only tool able to generate and proactively communicate immediate savings opportunities customized to the employee, their plan and local area.
1National Survey of Employer-Sponsored Health Plans. Mercer. November 2012.
2"Enrollment in Consumer Directed Health Plans Grew by 18 Percent in 2011." American Association of Preferred Provider Organizations. Web. 6 June 2012.
3National Survey of Employer-Sponsored Health Plans. Mercer. November 2012.
SOURCE Change Healthcare Corporation
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