There are two types of consumers; the informed and the uninformed. The patient, i.e. the consumer, is typically unaware of the total cost of health services provided to them. They may have a copay or deductible, but the explanation of benefits and outline of care comes after treatment has been rendered. This approach has made it difficult for patients to be able to “shop around” for the best prices when in most cases they are not sure what the cost treatment will be. They were, by no fault of their own, uninformed consumers due to plan designs.
The plan design of the health maintenance organization (HMO) for example, “masks the true cost of care” because the consumer only pays the copay (Kongstvedt, 2007, p.474). The copay is only a part of the total cost resulting in the consumer not seeing the value of the health insurance benefit. Consumer driven health plans (CDHP) were created, partly, so the consumer becomes aware of the true cost of health care, an example is the high-deductible health plan (HDHP). The consumer has the ability to see the true cost of care (transparency) by way of paying the high deductible. Not all CDHP are high deductible plans, any plan that allows a consumer to see the true cost of care can be labeled as such resulting in the consumer being more informed (Kongstvedt, 2007, p.474).
Health care carriers’ state that members who are enrolled in CDHPs have a reduction in health care costs (Munn, 2010, p.43). Proponents of CDHPs plans state that these types of plans provide incentives for healthy behaviors. The theory is that, when consumers are more aware of health costs they have a higher tendency to manage their health care better. Opponents of CDHPs argue that consumers do not have the required knowl...
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