INNOVATION IN EMPLOYER HEALTH COVERAGE: THE CONSUMER DRIVEN HEALTH PLAN (CDHP) AT LOGAN ALUMINUM

• Published in: Journal of the International Academy for Case Studies 2006-07, Vol.12 (4), p.7
• Main Author: Hatfield, Robert D
• Format: Article
• Language: English
• Subjects: Aluminum; Aluminum industry; Case studies; Consumer-driven health plans; Cost control; Employee benefits; Employees; Employers; Health care expenditures; Health maintenance organizations; Health services; HMOs; Industrialized nations; Insurance coverage; Learning; Politics; PPOs; R&D; Research & development; Students; Teaching
• ISSN: 1078-4950; 1532-5822

Healthcare costs are soaring in the U.S. and in other developed nations. The model used in the U. S. is that the government provides healthcare insurance for the poor and for senior citizens, while employers traditionally provide healthcare coverage for employees. Employers and government have tried approaches to containing the costs of healthcare insurance while still providing coverage. The government created the "health maintenance organizations" (HMOs) and the marketplace created "point-of-service" (POS) and "preferred provider organization" (PPO) plan designs. Managed care approaches were introduced into virtually all plans in an attempt to control runaway costs in recent years. Some feel that the a "free ride" approach causes consumers of healthcare to have no financial stake in the costs of health services which, in turn, makes such costs hard to control. Consumer driven health plans (CDHPs) have emerged as plans designed to get the consumer to take a normal consumer interest in the cost and quality of healthcare service. CDHPs must have two elements: some type of medical spending account and high deductible healthcare coverage insurance. Logan Aluminum manufacturing company provides a graphic illustration of the positive elements of a CDHP with lots of additional plan elements, such a wellness, financial incentives, and free health services. Since Logan has implemented the CDHP healthcare costs have not seen the huge increases seen in the U.S. The fact that Logan uses participative management and team approaches in other areas of its operation is seen as helping to get participation and teamwork on solving the healthcare cost problems. [PUBLICATION ABSTRACT]