This post will take a brief look at consumer directed health plans (CDHP) through the eyes of human-centered design. CDHPs became more popular in 2003 after federal legislation was passed that provided improved tax incentives to CDHP plan users. Since then, they’ve become increasingly popular, with most major healthcare payers provider CDHP plans. In short, CDHP is a broadly defined term for a health plan that tries to encourage the healthcare consumer/user to take on more responsibility for and involvement in their healthcare decision-making. This need for more decision-making ultimately stems from the fact that users have more skin in the game since CDHPs typically have high deductibles and require most cost sharing on behalf of the consumer. CDHPs are usually paired with an HSA/PHA that is used for non-covered expenses. After you’ve met your deductible, plans typically cover all the subsequent costs.
Why is this important? First, because this is an increasing trend in the U.S. and it’s important that we create solutions that foster good choices and healthy behavior. Ideally, people would not only make the right choice, but they’d do so in a way that was natural and required minimal cognitive load.
So, what’s a high deductible? Well, first I’m surprised you don’t have a CDHP (because then you’d know!). But for those that don’t know, the deductible is usually at least $1000 per year, but can be quite a bit higher. I’d like you to take a gut check. Imagine that you know that your healthcare costs wouldn’t be covered until you shelled out $1000. Would you spend more or less? Most people would say they’d spend less, but the fact is healthcare isn’t always predictable. Algorithms can take us pretty far, but even then people don’t trust them. As humans we have deeply rooted defense mechanisms that don’t allow ourselves to imagine being sick/injured in the future. We’re simply not good at being rational.
CDHP users have a major incentive to reduce costs of care (because who wants to deplete a resource they could otherwise use the in the future?), consumers will try to get more information on how much providers charge, how good providers are, and what the recommendations are for care paths. To ensure you have happy consumers, you better find the right/best way to put improved information in the palms of their hands.
Clearly, the strongest incentives are for those who haven’t reached their deductible since they have to pay the full cost of care. When you look at what people actually do under CDHP plans, researchers have found that patients are 2x as likely to ask about costs and 3x as likely to choose the cheaper treatment option. Furthermore, patients that have chronic conditions like diabetes are 20% more likely to follow their doctor’s treatment plan more closely. (Goodman, 2006). Sounds good, right? Health economists have even published research that people already use too much healthcare and when someone has a stomach ache, they will think twice about going to the ER, but will grab some Tums instead.
Of course, there’s a rub. Critics say that consumers who have less money or are less well educated will avoid necessary and appropriate care because of the costs and lack of ability to make informed choices. In addition, those with chronic conditions who will have recurring healthcare costs won’t be able to save money in their health savings accounts.
Let’s just assume both groups are right to a degree. A recent RAND study showed that CDHPs reduce the use of both appropriate and inappropriate care. In addition, the truth of the matter is that most payers don’t have adequate mechanisms to acquire the necessary information about cost and quality. The fact is, in general ‘consumer-choice’ isn’t an option.
What’s to be done? Let’s analyze this from a HCD perspective.
Let’s assume we’re going to keep CDHPs essentially the same, but modify the periphery. We won’t change the deductibles, the cost sharing, or the savings accounts.
Step one: Define the problem. My take here is that CDHP consumers don’t know how to choose and receive the right healthcare. If they knew how to receive the best care, they have more autonomy in their decision-making and consequently, could improve their outcomes and reduce long-term costs. There’s a big assumption here that consumers should use CDHPs at all, but let’s run with this idea a bit. Does anyone know how to receive the right healthcare? I’d argue that most people, regardless of the type of plan they use, aren’t receiving care in the most appropriate manner possible.
If I were digging a little deeper, I’d conduct a bit of research and observe CDHP consumers. Ethnographic research that looks to the heart of the problem might uncover additional or more central problems that are otherwise unknown. This research requires you to get outside of the office, approach the problem from multiple perspectives (e.g., psychological, economic, financial) and ask Why, Why, Why!
Step two: list and consider your options. A creative person could come up with a tremendous array of solving the problem. I’ll choose one. Use social networks to improve CDHP consumer’s ability to make decisions. It’s a bit broad, but that okay for step two. The opportunities for how to solve the problem are infinite. It’s far better to stay cross-functional at this point than it is to start designing the final solution. Keep it high level and remain open to modifications to your solutions. I’d rather see five people who take on different mindsets work on the problem for one person to work on the problem for five days. Perspective matters. Also, going back to a former blog post – prototype like crazy. Sometimes the best way to convey a thought, or run through an idea is to actually see it in 2D or 3D.
Step three: Start Cutting. Hopefully at this point, you’d have several great ideas/opportunities to solve your initial problem. Don’t start carving your solutions in stone quite yet. You need to remember that solutions are like babies. They are very delicate in their infancy, and if well tended to can grow up to be stars. Create a culture around your solutions that is conductive to growth, but still expects results. When asking others about your new idea, make sure to hear the good and the bad. Otherwise, you’ll end up pitching you big solution to the CEO and he/she will recognize the faults everyone else was too kind to discuss. You might have to combine ideas together to create a super-solution. After every major change, run the ideas past leaders and people you trust.
Step four: choose the best option and execute. You’ve finally come to the point where you can really start putting the rubber to the road and find out how your new product/service is received by consumers. The fact is, even the best performing ideas in the lab can fail. You only know true success when you see how actual users respond. With that in mind, fail quickly. This goes back to the agile form of development. Try to release a product that can stand on its own, but is also a solution that you can iterate until it’s perfected. Now get out there and find out how consumers are reacting. You’ll have to do more research to find out if you addressed the right problem or if you addressed it in the wrong way. Hopefully, you made the user forget a problem ever existed.
Leapfrog the expected. Dominate through design thinking.