Background
Consumer Driven Health Plans (CDHP) are high deductible healthcare models that have savings accounts. They also refer to medical plans that have higher deductible and relatively lower premiums (Jost, 2007). They are widely based on the idea that increased financial exposure encourages patients to behave like consumers; therefore, they compare healthcare costs and quality and negotiate for relatively lower prices. It is an employer-provided plan that has particular elements intended to motivate employees to participate in the healthcare procuring process. In most instances, CDHP are widely based on the principle of lowering the costs of a healthcare plan (Novak, 2011).
Advantages
Employees that are covered under a properly designed CDHP are likely to compare and contrast treatment plans, evaluate some of the services offered, and control costs. Besides, they are provided as affordable and flexible products with characteristics that give employers the option of choosing how employees spend their healthcare finances (Herzlinger, 2006). Furthermore, they give employees the ability to combine wellness options with comprehensive benefits as well as preventive services, thereby reducing or lowering the co-payment expenses. Most importantly, they lower the employer’s healthcare expenditure (Novak, 2011).
Disadvantages
The primary drawback of the CDHP is that they do not have the same benefits that other employer healthcare plans have. Specifically, the employer will have little control over the employees’ healthcare costs. Moreover, they employers might not have the relevant information about where their healthcare finances are spent to make informed decisions (Herzlinger, 2006).
Opinion
Essentially, some of the companies that have CDHP indicate that the administrative costs are relatively higher compared to other care plans. Nevertheless, I firmly believe that the company should charge individuals different premiums based on each individual’s risk. Such a strategy will benefit healthy individuals or people who are not prone to sickness because they do not have to spend huge premiums, yet they rarely use the care services (Novak, 2011). The employees will benefit from such a plan because their healthcare costs will be lowered. Even though the difference is not significant, especially when compared to other group health insurance plans, the company can save some money that it can use for other important developments (Herzlinger, 2006).
References
Herzlinger, R. (2006). Consumer-Driven Health Care: Implications for Providers, Payers, and Policy-Makers. New York: Jossey-Bass.
Jost, T. (2007). Health Care at Risk: A Critique of the Consumer-Driven Movement. New York: Duke University Press.
Novak, T. (2011). Consumer-driven health plans. Retrieved April 8, 2016, from <http://tonynovak.com/article/consumer-driven-health-plans.htm>
