Embracing Tools to Reduce Healthcare Costs
In 2005, the U.S. spent almost $2 trillion on healthcare. That, at 16 percent of GDP, is far higher even than Western European countries. (Germany and France, for example, spent 11 percent of GDP on healthcare.) In the U.S., almost 40 percent of this pie is paid by employers, whose cost has grown at over 12 percent per year since 2001.
It is critical that employers gain control of healthcare costs. Consumer-Directed Health Plans (CDHP) hold tremendous promise in achieving this. Early indications are that they immediately reduce annual growth in healthcare costs to less than 3.0 percent and, in many cases, are resulting in material YOY declines!
A wave of enabling federal legislation has offered tax advantages to CDHP and to the Health Savings Accounts that often accompany them. As a result, almost 50 percent of U.S. employers are expected to offer CDHP in 2007. Analysts project that the number of people with Health Savings Accounts will grow from 5 million in 2006 to 15-25 million by 2010, with HSA balances in excess of $75 billion.
A Stalled Promise

However, despite adoption of CDHP and the proliferation of editorial-based and community-based healthcare websites such as Revolution.com, WebMD.com, and DailyStrength.org, the promise of healthcare consumerism has stalled. A combination of apathy, procrastination and simple confusion over the complexity of managing one's own healthcare is contributing to the failure of employees to take the critical step of activating CDHP.

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