Consumer-Driven Healthcare: More Choice, Some Risk
Hoag Gets $5M Pavilion Gift; Garden Grove Opens Pediatric Unit
HEALTHCARE
by Vita Reed
Employer worries about the cost of healthcare are creating interest in new ways of delivering health benefits.
One of them,the so-called consumer-driven healthcare model,was the topic of a recent seminar in Costa Mesa put on by ABD Insurance and Financial Services, a Redwood City-based brokerage.
The session was designed to help employers decide whether consumer-driven plans could be viable for midsize and large groups.
“We want to look at what (the model) is, what it isn’t,” said Dennis Rainey, an ABD vice president who hosted the session.
Consumer-driven healthcare has gained attention on a national level. The Waltham, Mass.-based National Managed Health Care Congress, which puts on industry educational programs, looked at the concept during a conference last month.
“Employers have begun to work with a cluster of newly established managed care companies to develop benefits plans that employees can customize, giving far greater decision-making power over the design of their own benefits plan,” the congress said in a release. “These plans allow consumers to choose their own mix of health coverage for the price tag they wish to spend.”
The group also mentioned the debate surrounding such plans:
“Supporters of consumer-driven health plans point to increased consumer empowerment and access, particularly through the ability to tailor a plan for their specific needs and preferences. Critics argue that employers are using such plans to shift benefits costs and fiscal risks to employees; consumers with chronic illnesses or unexpected hospitalizations could end up spending thousands of dollars in out-of-pocket health costs.”
As an aside, the congress also said more traditional managed care plans are starting to develop hybrid models that provide less consumer autonomy in exchange for reduced fiscal risk.
The Orange County session focused on providing information about consumer-driven healthcare models.
“Generally, these are funded on a partially self-insured basis,” Rainey said. “The employer has to believe they will save money,there is a component of risk for the employer.”
Rainey likened consumer-driven plans to a preferred provider organization plan with a high deductible. There’s also a medical savings plan.
“The word ‘co-pay’ disappears from the vocabulary,” he said.
An example of how consumer-driven healthcare works was given by Christine Metz, a West Coast-based vice president of sales for Lumenos Inc., a venture-backed health services company out of Alexandria, Va. Lumenos bases its consumer-driven healthcare approach on the concept of combining medical savings accounts with a high-deductible insurance policy for more serious conditions.
Under the Lumenos model, employees can visit any physician, dentist or pharmacy they want, and the bill is sent to Lumenos, which deducts the amount from their account. Interest accrues on the accounts, and any money left at the end of the year rolls into the next year.
Hoag Pavilion Gets Gift
Hoag Memorial Hospital Presbyterian, Newport Beach, received a $5 million grant from the A. Gary Anderson Family Foundation. The money is part of the fundraising for Hoag’s Women’s Pavilion, which is under construction.
The campaign, led by Ginny Ueberroth, Arden Flamson and Sandy Sewell, has raised some $48 million toward a $50 million goal in 2 1/2 years, according to the hospital. Hoag’s Women’s Pavilion, which will have seven stories and 309,000 square feet of space, is set to open in 2005.
Anderson, who died in 1992, spent much of his career in mortgage banking and real estate. He was a longtime resident of Orange and Riverside counties. The fifth floor of the Women’s Pavilion will be named in recognition of the gift from the Anderson Foundation.
Garden Grove Opens Kids Unit
Garden Grove Hospital and Medical Center, one of 10 Orange County acute-care hospitals owned by Santa Barbara-based Tenet Healthcare Corp., is in the midst of a $3.5 million expansion As part of that, the 167-bed facility recently opened a 13-bed pediatric healthcare unit.
The unit is designed to provide a separate area for pediatric patients and their families. Other features of the pediatric unit include a play area, treatment room and a room allowing parents to sleep while spending the night with their children.
Overall, Garden Grove is planning to add more services and expand outreach efforts in the coming months, said Maxine Cooper, the hospital’s chief executive.
Bits and Pieces:
The National Committee for Quality Assurance awarded Kaiser Permanente’s Southern California health plan “excellent” accreditation status. The committee, an industry trade group, grants such status to plans that demonstrate levels of service and clinical quality that meet or exceed its requirements for consumer protection and quality improvements. Kaiser operates the largest health maintenance organization in Orange County, with some 335,200 members UCI Medical Center, Orange, said the first procedure using the da Vinci robotic surgical system was completed recently at the facility. The system was used on a procedure to treat gastroesophageal reflux disease; additional procedures to remove a benign tumor from the stomach muscle wall and a gall bladder were scheduled later in the day.
