Friday, June 25, 2004
Evidence of consumer driven health care success
["Whole Foods' Patient Power Health Plan," NCPA Daily Policy Digest, 25 June 2004.]
Here is a good real-life example of how people respond to the incentives of health savings accounts:
Whole Foods, the 159-store grocery chain, last year adopted a health plan that encourages its 30,000 or so workers to feel a bit of the pain every time a doctor sends out a bill. The new "consumer driven" medical coverage gives employees more of a financial stake in what they pay for medical care in hopes of slowing the growth in medical costs, say observers.
Key features of Whole Foods' "consumer driven" health-care plan:
- After a few months on the job, individual workers get free coverage; for workers with families, free coverage starts after about five years.
- There is a $500 for prescriptions and $1,000 for all other medical costs.
- However, Whole Foods contributes $300 to $1,800 per year, depending on an employee's length of employment, to help meet the deductible.
- Overall medical claims fell 13 percent in the first year and about 90 percent of employees had money left over to use next year.
The Whole Foods plan, which workers themselves chose over two competing plans after a series of votes last summer, has no premiums at all for many workers. But the deductible is a relatively hefty $1,500. Whole Foods each year puts money into an account for each worker to use for health-care expenses. If employees don't spend their money in one year, they get to carry it over to future years. After the deductible is reached, the plan operates more like a traditional one, picking up 80 percent of most medical expenses.
The hope is that once the money feels as though it belongs to them, people won't get an MRI when an X-ray (or an ice pack) might do.
["Whole Foods' Patient Power Health Plan," NCPA Daily Policy Digest, 25 June 2004.]
Here is a good real-life example of how people respond to the incentives of health savings accounts:
Whole Foods, the 159-store grocery chain, last year adopted a health plan that encourages its 30,000 or so workers to feel a bit of the pain every time a doctor sends out a bill. The new "consumer driven" medical coverage gives employees more of a financial stake in what they pay for medical care in hopes of slowing the growth in medical costs, say observers.
Key features of Whole Foods' "consumer driven" health-care plan:
- After a few months on the job, individual workers get free coverage; for workers with families, free coverage starts after about five years.
- There is a $500 for prescriptions and $1,000 for all other medical costs.
- However, Whole Foods contributes $300 to $1,800 per year, depending on an employee's length of employment, to help meet the deductible.
- Overall medical claims fell 13 percent in the first year and about 90 percent of employees had money left over to use next year.
The Whole Foods plan, which workers themselves chose over two competing plans after a series of votes last summer, has no premiums at all for many workers. But the deductible is a relatively hefty $1,500. Whole Foods each year puts money into an account for each worker to use for health-care expenses. If employees don't spend their money in one year, they get to carry it over to future years. After the deductible is reached, the plan operates more like a traditional one, picking up 80 percent of most medical expenses.
The hope is that once the money feels as though it belongs to them, people won't get an MRI when an X-ray (or an ice pack) might do.
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