Bridge Out! Consumer-Driven Health Plans will Change How We Get Care | Consumer Information

Bridge Out: A road sign you really never want to see. Its appearance in your path means that there has been a failure and that you have to find a new way of getting where you want to go. The rise of consumer-driven health plans indicates that the era of managed care failed to control the increased cost and demand for care and that many things about the way we receive healthcare in the US.In late August 2006, Wellpoint, one of the nation’s biggest healthcare insurance providers, has gone on record stating that in 2007 they will the first insurer to have consumer-driven health plans in all states and for all types of people (from major employers to small groups to individual plans). “Our customers who choose these consumer-driven products will have new opportunities to lead healthier lives because of this first-of-its-kind national offering,” Wellpoint CEO, Larry GlassockThe press release also goes on to share: “we’re empowering consumers through unique and robust online tools and incentives that encourage and reward them for choosing to live healthier lifestyles… Consumers who choose Lumenos will be eligible for extensive preventive care and personal health coaching, as well as smoking cessation and weight management programs. In addition, most consumers will receive financial rewards for completing various wellness programs.”


WOW! That sounds great, right?!?!?! Well, I always read these things and think about what my parents and my in-laws know about healthcare/ health policy and what they would think.So for those of you who are not familiar with this new type of health plan, their implementation will produce significant changes in how care is reimbursed. Consumer-driven health plans are designed to shift some of the financial decision-making and responsibility to the individuals who consume healthcare services. Health savings accounts and high deductibles are key components to this new type of health plan. The thought behind all of this is to allow patients to determine how best to spend their healthcare dollars.If you buy into traditional economic theory as applicable to the healthcare industry, this is not a bad way of trying to control skyrocketing costs. Since the price of services has a direct impact on demand for services, in theory , this type of plan has the potential to reduce duplication of services and unnecessary utilization of higher levels (more expensive) of care. In very simple terms, if patients are required to share some of the financial responsibility of their care, then they are more likely to choose the cheapest, most effective care.There are at least two very big ‘rubs’ to this plan. First, in order to to be able to make appropriate choices, consumers will need to know the cost of the care. While it seems easy enough, a physician or facilities’ billing rate for a service is significantly different than a contracted rate. And a contracted rate or allowable charge is significantly differerent than the acutal amount paid for services by an insurer or other third party payer. So healthcare consumers will need to understand all of these to be able to make the appropriate choices. Also healthcare providers will need to set up a system to be able to accurately inform the consumer the costs for a service. While this seems easy enough, it becomes increasingly complex when one understands that every, single, solitary insurance plan is different in regards to deductible, copay, contracted rate and reimbursement rate.Second, in order to be able to chose the cheapest, effective treatment, healthcare consumers will have to know and understand their treatment options. This means that they will need to better understand the science behind their illnesses as well as the science behind the possible treatments. This would be a whole lot easier if we went back to the old world model of having healthcare providers that were able to develop rapport and a trusting patient-provider relationship. In the past, providers were given the time and opportunity to really partner with individuals, understand the complexities of care and develop a truly individualzed treatment that best fit the patient/consumer’s need. However, in the days of the 15 minute visit, this becomes increasingly difficult to do.


President Bush’s recent executive order [http://www.whitehouse.gov/news/releases/2006/08/20060822-2.html] pushing for many things including transparency of pricing information is an attempt to address the issue of understanding the financial aspects.However, how do we make sure individuals have the information they need to be able to get the best treatment value? In reality, physicians and healthcare providers, because of their ability to understand and evaluate individual cases and circumstances, are the best resources for helping individuals make these decisions. However, they will likely need to develop new ways of doing this that are cost and time efficient. If healthcare providers do not develop these new ways, consumers/patients will be left to fend for themselves.If consumers do not adequately educate themselves or access resources/advocates that will assist them, then this plan too is doomed. Costs will not be contained, health will not be preserved and access to appropriate, effective care will continue to be compromised.

Consumer’s Decision Making – Preeminent Tool to Analyze Consumer Behaviour | Consumer Information

Analyzing consumer behavior is perceived as cornerstone of a successful marketing strategy (Papers4you.com, 2006). Consumer behavior is ‘ the mental and emotional processes and the observable behavior of consumers during searching purchasing and post consumption of a product and service(Batra & Kazmi, 2004) . Similarly Engel (et al, 1990) refers consumer behavior as the action and decision process of people who purchase goods and services for personal consumption.Now if these defining criteria are closely observed, it is evident that analyzing consumer’s decision making process is the foundation of entire notion of consumer behaviorThere are four different views related to consumer decision making process and behavior (Schiffman & Kanuk, 2004). It is argued that first of them is ‘economic view’ that consumers are primarily facing imperfect competition and they are always expected to make rational decision on the basis of assumptions that they are aware of all product alternatives, they can rank benefits and limitation of each alternative and are able to identify one best alternative. Second ‘Passive View’ is absolutely opposite to economic view and suggests that consumers are irrational and impulsive as they are submissive to self-centered interests of marketers and got influenced by marketing tools. Similarly third, ‘ Emotional View’ is related to perceive consumer’s decision making based on their emotional association or feeling about some products and services. For instance, a person losing red color specific pen neither go for rational decision by evaluating alternatives ( economic view) nor will the person get influenced by marketers ( passive view). Rather the person will try to purchase any pen closely resembled with his favorite possession. Fourth and arguably most acknowledged view is ‘Cognitive View’ where consumers are considered as “thinking problem solver’ which are receptive as well as actively searching for the products and services that can fulfill their need. Consumer’s behavior under this view is based on information seeking and processing attributes usually directed by a goal. For instance, buying a tooth paste from shop can have a certain goal of choosing product that can taste good (Papers4you.com, 2006).


Despite of critiques for each viewpoint, it can be considered a valid argument, that all four types of decision making behavior exist and provide marketer guidelines to analyze consumer accordingly.Based on general perception about most acknowledged and common ‘cognitive view’, Batra & Kazmi (2004) asserts broader stages of a consumer’s decision making process that includes problem identification (feeling need of a new car), information search ( on internet and showrooms), evaluation of alternatives (comparing brands, for instance’ on basis of repute and features), outlet selection and purchase ( purchasing selected item) and post-purchase action (satisfaction or dissonance).


The discussion may be concluded on the notion that no matter which view point out of four discussed above is common; it is an imperative fact that marketers have to realize existence of all of them to analyze consumer behavior effectively.ReferencesBatra, S, K & Kazmi, S,H,H ( 2004), ‘Consumer Behaviour- Text and Cases’, New Delhi: Excel BooksEngel, J, F, Blackwell, R, D & Miniard, P, W, (1990), ‘Consumer Behaviour’ London: Dryden PressPapers For You (2006) “E/M/68. To what extent does Advertising affect Consumer Behaviour?”, Available from http://www.coursework4you.co.uk/sprtmrk38.htm [19/06/2006]Papers For You (2006) “P/M/551. What influences consumer behaviour?”, Available from Papers4you.com [19/06/2006]Schiffman , L, G & Kanuk, L, l, (2004), ‘Consumer Behaviour’ New Jersey: Prentice- Hall Inc