Effective Implementation - Key to Success in Consumer Directed Healthcare Plans Market

Business Wire, Feb 22, 2005

PALO ALTO, Calif. -- The popularity of consumer directed healthcare plans (CDHP) is on the rise given their ability to significantly reduce the costs associated with conventional employer-sponsored health plans.

The key differentiating factor of a CDHP is that the employee/consumer heads the decision-making process. In order to deliver such a value proposition, vendors need to develop a more organized and efficient implementation strategy.

New analysis from Frost & Sullivan (http://www.healthcare.frost.com), U.S. Consumer Directed Health Plan Markets, reveals that revenue from premiums in this market totaled $7.14 billion in January 2004. It projects to grow at a compound annual growth rate (CAGR) of 128 percent to reach $192.51 billion in 2008.

If you are interested in a virtual brochure, which provides manufacturers, end-users and other industry participants an overview of the latest analysis of the U.S. Consumer Directed Health Plan Markets - then send an email to Danielle White - Corporate Communications at dwhite@frost.com with the following information: your full name, company name, title, telephone number, fax number and email. Upon receipt of the above information, an overview will be sent to you via e-mail.

"Transition from conventional healthcare plans to the CDHP must be smooth," says Frost & Sullivan Research Analyst Natesh Subbarajagupta Kare. "In addition, a proper analysis of communication strategy during and after implementation ensures quicker adoption of CDHP."

While more than 70 percent of employers are providing the necessary tools for collecting relevant healthcare information, very few are following up on how their employees are utilizing these services. Vendors can gain a competitive edge by assisting the employers in gathering the information most sought out by employees.

"In-depth analysis of factors such as accessibility and frequency of online access to information enables vendors to identify and bridge gaps in the employer's communications channel," notes Kare.

For successful CDHP implementation, it has also become imperative to integrate every channel member such as providers, employees, and payers into the IT loop. Services such as real-time transaction process viewing and online interaction with the provider allow vendors to gain an edge over competitors.

Collaborating with solution providers who can manage the automated claims management processes such as adjudication, account specific out-of-packet expenses management, and claim certification is another emerging trend in the CDHP market.

Ultimately, implementation strategies need to be integrated with risk assessment, IT, and product promotion in order to consistently increase the client base and promote customer satisfaction in the long term.

The introduction of tax-benefits for self-sponsored CDHP plans is also expected to drive the market and reduce the number of uninsured Americans, which currently stands at around 45 million.

Prescription drug benefits and cost-effective coverage for senior citizens and uninsured population are other important areas of focus that are likely to increase demand for CDHP.

"Comprehensive provider network, wider coverage of healthcare services including ophthalmic and dental care, and lower premiums are important promotional benefits that vendors can turn to for sustained growth in the future," says Kare.

U.S. Consumer Directed Health Plan Markets, part of the Healthcare and Life Sciences IT subscription, examines the current dynamics and trends in the U.S. market for CDHP Health Reimbursement Arrangement (HRA), Health Savings Account (HSA), and Flexible Spending Account (FSA). In addition to important drivers and restraints, the study offers competitive strategies that enable vendors to exploit future growth opportunities. Interviews are available to the press.

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services and corporate management training to identify and develop opportunities. While serving clientele including Global 1000 companies, emerging companies, and the investment community, Frost & Sullivan's comprehensive industry coverage includes a unique global perspective that combines ongoing analysis of markets, technologies, econometrics, and demographics. For more information, visit http://www.frost.com.

U.S. Consumer Directed Health Plan Markets

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Keywords in this release: consumer directed healthcare plans, consumer driven health plans, CDHP, employer-sponsored health plans, Health Reimbursement Arrangement, HRA, Health Savings Account, HSA, Flexible Spending Account, FSA, automated claims management processes, tax benefits, ophthalmic and dental care, research, information, market, trends, technology, service, forecast, market share