Health insurance premium costs increased by 178 percent between 2001 and 2010, and, as Figure 1 illustrates, health care costs have increased much more quickly in the United States than they have in other industrialized countries, so health care costs pose a threat to the global competitiveness of U.S. companies. In response to increasing cost pressure, many U.S. companies are experimenting with new approaches to benefit design that aim at delivering higher-value health care services to their employees. The passage of the Patient Protection and Affordable Care Act (Pub. L. 111-148, 2010) has further piqued employers' interest in new benefit designs because it includes numerous provisions that favor cost-reducing strategies, such as workplace wellness programs, value-based insurance design (VBID), and consumer-directed health plans (CDHPs). For example, the excise tax imposed on high-cost plans favors lower-cost coverage options, such as CDHPs, and the implementation of wellness programs is being supported by several changes to the law that allow employers more discretion to reward employees for healthy lifestyles.
Health Care Costs in the United States and in Other Industrialized Countries
Approaches to benefit design, such as wellness programs, VBID, and CDHPs, fundamentally change the consumer's role in health care, in that they require consumers to become engaged and informed decisionmakers. Decisions about which coverage options to choose and where to seek care will become more complex and demanding, and the financial implications of those decisions will become more substantial under new benefit designs. If executed well, new benefit designs can support a partnership between employer and employee and help employees enjoy better health while spending less on health care.
In spite of increasing incentives and the promise of these approaches, uptake and implementation of wellness programs, CDHPs, and VBID is far from universal. Only 54 percent of large employers offered a CDHP option in 2010 (Towers Watson, 2010), despite evidence that these plans can result in significant reductions in health care spending (U.S. Government Accountability Office [GAO], 2010; Buntin, Haviland, et al., 2011; Buntin, Damberg, Haviland, Kapur, et al., 2006; Miller, 2005). Likewise, many employers are finding it difficult to realize the full benefits of VBID; in fact, a recent study indicates that less than 20 percent of employers regard their implementation of VBID as being “very successful” (see Figure 2).
Employers' Satisfaction with Value-Based Insurance Design, 2008
Lack of employee engagement is commonly seen as a key obstacle to realizing the full benefit of workplace wellness programs. Although participation rates vary across organizations, they remain low overall. For example, more than half (52 percent) of companies that offer health risk assessments to their employees report participation rates of 50 percent or less (Baicker, Cutler, and Song, 2010). Participation rates in other programs, such as weight management, health coaching, and smoking cessation, are also typically quite low (Baicker, Cutler, and Song, 2010). A second important obstacle to realizing the full potential of these approaches to benefit design is lack of adequate decision-support tools, and comparing quality or value across different health care providers continues to be difficult for consumers. The U.S. Government Accountability Office has concluded that, in general, insurance carriers do not provide sufficient information for enrollees to identify high-quality care and that quality metrics provided to assess individual physicians do not facilitate meaningful comparisons. Similarly, the same report found that comparative cost data about health care providers were not readily available for consumers (GAO, 2006).
To overcome the obstacles of health care benefit redesign, consumers will need appropriate decision-support tools and access to resources that can help them actively manage their health risks and health care utilization. And, given the structure of the U.S. health care system, there are compelling incentives for employers to provide such tools and resources. In order to support benefit options, such as wellness programs, VBID, and CDHPs, these tools should promote employee engagement and provide actionable information that supports more-informed health care consumerism.
Consumer-controlled personal health management systems (HMSs) are a class of tools that provide such encouragement, data, and decision support to individuals. There is no universally accepted term for such tools at the moment. Developers refer to them descriptively as enhanced personal health records or personal health platforms or by their respective product names. For the purposes of this article, we use the term health management system. Broadly, an HMS is a person-centric repository for data from various sources combined with a suite of other features and functions that are designed to engage and assist individuals in the management of their own health and wellness. Its functionalities fall into the following three categories: health information management, promotion of wellness and healthy lifestyles, and decision support.
The concept of an HMS is relatively new and not widely used yet. Consequently, data on the potential impact of integrated solutions, such as the HMS, are limited. However, several of the functionalities that the HMS seeks to integrate have been evaluated in the research literature with largely positive results. In this paper, we review the evidence for many of the possible components of an HMS, including the following:
- personal health record
- web-based health risk assessment
- integrated remote monitoring data
- personalized health education and messaging
- nutrition solutions and physical activity monitoring
- diabetes-management solutions
- medication reminders
- vaccination and preventive-care applications
- integrated incentive programs
- social-networking tools
- comparative data on price and value of providers
- telehealth consultations
- virtual coaching
- integrated nurse hotline.
Many employers are now testing approaches to deliver such information and decision support. The most typical approach is a web portal that allows an employee to take a health risk assessment and then links him or her to programs and other resources that match his or her particular risk profile. In addition, those portals are used to communicate health-related content to all employees, irrespective of risk profiles. An HMS as sketched out in this article is an evolutionary step beyond existing tools, in that it integrates data from a variety of sources and customizes tools, resources, and information to a greater extent. In addition, the HMS can provide a platform for developers to build applications that will engage employees in their own health and health care and make more-informed choices about their health care consumption. The proliferation of Web 2.0 applications for wellness and health will drive innovation, but it will also make it increasingly difficult for employers to identify which applications are most appropriate for their employees. This dilemma might be most efficiently solved through establishing a “health application marketplace.” The marketplace model for applications is common and likely familiar to consumers (e.g., Apple's App Stores). Integrating the marketplace into the HMS has the added advantage of leveraging the availability of an individual's health data and social network, which should enable an employee to solicit feedback from his or her peers and identify products and applications that are most likely to fit his or her individual needs.
In principle, the HMS is an attractive idea; indeed, leveraging personalized health information and integrating the presently disparate features described in this paper into a “one-stop shop” could make the whole greater than the sum of its parts. However, this hypothesis remains untested, and the value of the HMS will be borne out as employers begin to adopt and implement these emerging technologies and further assess their effects on employee behavior, health care costs, and overall value.
Baicker, Katherine, David Cutler, and Zirui Song, “Workplace Wellness Programs Can Generate Savings,” Health Affairs, Vol. 29, No. 2, February 2010, pp. 304–311.
Buntin, Melinda Beeuwkes, Cheryl Damberg, Amelia Haviland, Kanika Kapur, Nicole Lurie, Roland McDevitt, and M. Susan Marquis, “Consumer-Directed Health Care: Early Evidence About Effects on Cost and Quality,” Health Affairs, Vol. 25, No. 6, November–December 2006, pp. w516–w530.
Buntin, Melinda Beeuwkes, Amelia M. Haviland, Roland McDevitt, and Neeraj Sood, “Healthcare Spending and Preventive Care in High-Deductible and Consumer-Directed Health Plans,” American Journal of Managed Care, Vol. 17, No. 3, 2011, pp. 222–230.
Choudhry, Niteesh K., Michael A. Fischer, Jerry Avorn, Sebastian Schneeweiss, Daniel H. Solomon, Christine Berman, Saira Jan, Jun Liu, Joyce Lii, M. Alan Brookhart, John J. Mahoney, and William H. Shrank, “At Pitney Bowes, Value-Based Insurance Design Cut Copayments and Increased Drug Adherence,” Health Affairs, Vol. 29, No. 11, November 2010, pp. 1995–2001.
GAO—see U.S. Government Accountability Office.
Mercer, Mercer's National Survey of Employer-Sponsored Health Plans 2008, February 18, 2009. As of August 17, 2011:
Miller, Stephen, “Consumer-Directed Health Plans: CEOs' Perspectives on Success,” Society for Human Resource Management, February 22, 2005. As of May 31, 2011:
Organisation for Economic Co-operation and Development, OECD Health Data 2010: Statistics and Indicators, 19th ed., Paris, October 2010.
Public Law 111-148, Patient Protection and Affordable Care Act, March 23, 2010. As of August 9, 2011:
Towers Watson, Raising the Bar on Health Care: Moving Beyond Incremental Change—15th Annual National Business Group on Health/Towers Watson Employer Survey on Purchasing Value in Health Care, March 2010. As of May 31, 2011:
U.S. Government Accountability Office, Consumer-Directed Health Plans: Small but Growing Enrollment Fueled by Rising Cost of Health Care Coverage—Report to the Chairman, Committee on the Budget, House of Representatives, Washington, D.C., GAO-06-514, April 2006. As of August 10, 2011:
———, Consumer-Directed Health Plans: Health Status, Spending, and Utilization of Enrollees in Plans Based on Health Reimbursement Arrangements—Report to Congressional Requesters, Washington, D.C., GAO-10-616, June 2010. As of August 10, 2011: