Consumer-Driven Healthcare: Information, Incentives, Enrollment, and Implications for National Health Expenditures
There Are Reasons For Optimism
By Paul Hughes-Cromwick, Sarah Root, and Charles Roehrig
Paul Hughes-Cromwick is a health economist with over 20 years of experience serving state, federal government, and private-sector clients. He is a senior analyst at AltarumInstitute, a nonprofit health systems research institute. Until its sale in 2007, he was Chairman of the Board of Care Choices, HMO, Farmington Hills,MI. He is working to developmetrics to gauge the progress of the current US health systemagainst attributes of a transformed future system. He has a B.S. inmathematics fromthe University of Notre Dame, and anM.A. in Applied Economics fromClark University.
Sarah Root is assistant professor in the Department of Industrial Engineering at the University of Arkansas. Her research work focuses on both healthcare and logistics problems.When this research was conducted, she was completing her Ph.D. in Industrial and Operations Engineering, University of Michigan.
Charles Roehrig is a health economist and the vice president of the Health Solutions Division of Altarum and the creator of the Altarum Health Sector Model. He has over 30 years experience in the analysis of healthcare utilization and costs. He received his Ph.D. in Economics and his M.A. from the University of Michigan.
We highlight the importance of information for consumerdriven healthcare (CDHC), describe barriers, display data on adoption rates and product features, and use a new health modeling approach to investigate the potential impact on national healthcare expenditures. We conclude with an assessment of the prospects for CDHC as a revolution of information, competition, and market orientation; and we discuss potential pitfalls, including concern regarding vulnerable populations. While the jury is out on the ultimate effects, enrollment in CDHC programs— while still small—is growing rapidly; utilization and costs for subscribers appear to be moderating; and creative benefit structures emphasize health promotion alongside previously unseen cost consciousness.
