Expert Q&A: Helping Employees to Be Smarter Health Care Consumers

Fifty-five percent of employees don't know that they can compare the cost of health care treatments or services before choosing where to get care, while 57 percent check if a provider is in network only when they plan to visit a new provider or facility, even though providers' network status can change from year to year.

Those are among the findings in a September 2021 report on health care literacy by Birmingham, Ala.-based DirectPath, a benefits education, enrollment and health care transparency firm. DirectPath conducted a survey earlier this year of more than 1,000 respondents with employer-sponsored insurance.

Kim Buckey, vice president of client services at DirectPath, recently answered questions from SHRM Online about the steps employers can take to improve employees' understanding of health care costs and how to shop for nonemergency health care services.

SHRM Online: How is health care literacy and consumerism important for employers and employees?

Kim Buckey: If employees don't understand the basic terms and concepts of health insurance, it can be difficult for them to appreciate how their decisions can affect the cost of their care. Because they don't shop for care, they often end up paying more than they need to for health coverage and health services. When they pay more than they need to, it hits them—and their employers—in the wallet.

Assume employees are told to get a test at their local hospital, which charges $1,000. If employees haven't met their deductible, they have to pay that amount out of pocket. If they have met their deductible, they'll still have to pay a share of that cost—often 20 percent or 30 percent.

By shopping around, they might discover they can get the same test done at a stand-alone testing center for $500. Wouldn't they rather pay 20 percent of $500 instead of $1,000? And remember, the employer often pays a percentage—typically 70 or 80 percent—of that same $1,000 or $500.

For self-insured plans, that's a direct hit to their bottom line. For fully insured plans with premiums based on participant experience, the choice of the $1,000 test—and similar choices made by other employees—will eventually drive up premiums.

Worse, employees may become fearful of costs, especially if they haven't met their deductible and postpone or even neglect getting the care they need—missing the opportunity to identify and attend to potential health issues early, before they become chronic or acute and even more expensive.

SHRM Online: Is the situation around health care consumerism improving?

Buckey: Recently enacted legislation requiring transparency in health care pricing and related agency guidance has been a big driver for employers—if they must invest in the tools mandated by the government to provide cost-comparison information from health care providers, they are certainly going to want to make sure their employees know that those tools are available and how to use them. That requires some pre-education about what's coming and why it's important.

SHRM Online: What are the best steps employees can take?

Buckey: For employees, make it your business to get familiar with the tools your employer and your plan offer. Check the benefits page on your employer's website, your local hospital's webpage and your carrier's member page for information and tools to help you research pricing. Taking the time to investigate consumer sites such as GoodRx and FairHealth, to name just two, can help you get comfortable with the process. Ask your employer if they offer transparency and advocacy services—they can do the work for you and help you with the decision-making process.

For employers, make it easy for employees to get help. In addition to a basic education campaign emphasizing that employees can shop for health care without risking quality, it's important to explain exactly how to do it and what resources are available to help. Work with your carriers, your brokers, your consultants and other partners to make sure there are tools available—and resources to help employees to use and make sense of these tools.

Emphasize the "what's in it for me": Provide examples to show how employees and their families can obtain quality care while managing their costs.