Account-Based Health Plans (ABHPs) have been a key part of the movement toward health care consumerism. ABHPs generally consist of a high deductible health plan coupled with some form of savings account, such as a Health Savings Account (HSA) or Health Reimbursement Account (HRA). In theory, ABHPs have the potential to lower individual and corporate health care costs by raising consumer awareness of cost — through measures such as the high upfront deductible — and by providing incentives, through the savings account accumulation, to choose the most cost-effective, quality care and forego unnecessary care.
However, not all employers that implement these plans see the expected drop in cost, nor the plan participation they envisioned. A study from Towers Perrin analyzes the factors in account-based plan strategy, design, implementation and management that characterize successful plans. High-performing programs, the study found, have the right approach to implementation, delivery and employee engagement.
One of its “most striking findings,” according to the study, is the critical role that comfort with financial risk plays in employees’ acceptance of and engagement with account-based plans. Thus, helping employees gain confidence in their ability to manage financial risk, in order to enable them to embrace the responsibilities necessary for a good account-based plan experience, is a key indicator of program success. ABHP participants who said they felt comfortable with the level of financial risk their plan exposed them to were more likely than those who were not comfortable with risk to:
- Assess their plan experience as good (88% vs. 29%)
- Say they understood how their health benefits program works (86% vs. 41%)
- Say they thought they could affect their own and their employers’ health care costs (73% vs. 50%)
- Find it appropriate that they pay a share of health care cost increases (71% vs. 40%)
- Agree that they should pay a larger share of the cost if they use more expensive health care (61% vs. 30%)
The study stresses that employers are capable of increasing employees’ comfort with risk, with benefits communications being the critical element to accomplishing this.
Another characteristic of successful programs was their ability to build a new mindset, both for employees and employers, around health and long-term commitment to the program. According to the study, both employees and their employers need to build a new mindset in order for ABHPs to reach their full potential. For example, the study found that participants in account-based plans were less satisfied than participants in traditional plans with various aspects of their health plans. However, the study states that employee dissatisfaction appeared to be based more on perception than on a realistic comparison of plan features and benefits, indicating that the account-based plan participants were thinking of their health plan in a one-year cycle — like traditional plans run — rather than in terms of the long-term benefits of an account-based plan.
According to the study, successful programs also were able to create an organizational culture in which employees trust management and believe that the company cares about employees’ well-being, and to use strategic change management initiatives, ongoing communications and visible leadership to build trust and a healthy work environment.
In sum, companies that assessed employee readiness for change, communicated honestly and consistently about the account-based plan program, and launched the program within a structured change management strategy achieved better success with their ABHPs than companies that focused on isolated plan elements or applied traditional communication techniques. Thus, companies must recognize that account-based plans are, for employees, an entirely new way to think about health care, and approach implementation strategy and communications accordingly.