The question of the day, at least as it relates to healthcare plan design, seems to be “PPO or high-deductible plan”? Consumers are asking this question of themselves as they are registering for next year’s benefits and plan administrators are already beginning to think about what to offer during the next open enrollment. Next year sees the implementation of the Affordable Care Act (ACA) requirement that all copays must apply towards the out of pocket limit for healthcare plans that haven’t already had to comply, leaving grandfathered plans as the only exception. This changes how traditional PPO plans are viewed, and as we move towards the implementation of the Cadillac Tax in 2018 many employers are thinking high-deductible health plans are the only way to avoid penalties. So, what is the right answer – PPO or high-deductible plan? Our answer is that there is no single right answer – every employer, maybe even every employee within an employer’s organization, could have a different right answer. We believe the only way to find the right answer(s) for your population is by using your historical healthcare data.
Remember being handed a blank canvas during art class with the instruction to “paint something”? A lot of students found this really overwhelming, not knowing what to draw, what colors to use, or where to start. More times than not, those students ended up with a bunch of intersecting color blobs instead of a masterpiece because they needed guidance, a starting point, some structure – sort of like what you would get from a paint-by-the-numbers kit. The whole idea of painting by the numbers is that you can paint a masterpiece because the lines are drawn for you and you have a reference point of what color belongs in which box. Historical healthcare data can offer this same reference point for plan administrators when they are trying to make changes to their benefit plans.
With access to the plan’s healthcare data, you have all the information needed to paint each box (or plan parameter) the right color. Plan data tells you about the dollars that were spent last year, or over the last several years, and it also shows you the utilization patterns of different types of members. Combining these facts can help to draw the lines around the plan offerings and point to which color to use – PPO Purple or High-Deductible Green. Using data points like predicted risk scores, chronic condition care compliance and biometric score trends can help a plan administrator have greater insight into the future expenses and utilization patterns of their population, ensuring just the right shade of PPO is used and that the plan is painting inside the lines of the high-deductible box. Having access to your healthcare data helps you paint your plan design by the numbers and create a masterpiece.