Frequently Asked Questions About the Breakthrough Plan

The Pacific Business Group on Health (PBGH) (www.pbgh.org), a major non–profit coalition of 44 purchasers, is committed to offering a new consumer–driven health care approach to its member–companies. In partnership with Minneapolis–based Definity Health (www.definityhealth.com), PBGH is designing a health benefit plan that gives consumers greater choice and responsibility over their health care decisions.

Why Did PBGH Develop the Breakthrough Plan?

PBGH sought to develop the Breakthrough Plan in response to widely recognized shortcomings in existing health care options. Currently:

• Consumers have little access to information about medical costs and even fewer tools to evaluate providers and treatment options. Dissatisfaction is widespread, especially among the chronically ill;
• While consumers have been largely insulated from rising costs, purchasers face substantial premium increases but see little improvement in quality or customer service; and
• Providers are increasingly unhappy with the bureaucracy of traditional health plans and their interference in the doctor–patient relationship.

In recognition of these problems, for many years PBGH has worked to collect and publicly report quality information and make it accessible to consumers. Organizations (including Definity Health) have built on–line tools that make personalizing and sharing this kind of data easier than ever before.

With the Breakthrough Plan, PBGH is able to contribute its quality reporting tools to Definity Health's consumer–driven health model to create a fundamentally new approach to health care delivery that will benefit consumers, purchasers, and providers and spur innovation throughout the health care system.

If the Breakthrough Plan Isn't Managed Care, What Is It?

The Breakthrough Plan is not a managed care plan. The plan introduces greater flexibility in selection and use of providers. The plan brings a new approach to health care delivery, based on giving consumers control over their health care decisions and providing quality information on local providers to help them make informed, value–based decisions. In addition, however, virtually all of the elements of the Breakthrough Plan can be incorporated into traditional health plans. (See "How the Breakthrough Plan Works" for details.)

The Breakthrough Plan is not a defined contribution plan. Under defined contribution, the employer limits its financial risk by contributing a fixed amount of money for each employee to use in the purchase of health care coverage in the open market. Under the Breakthrough Plan, the employer is still providing employees comprehensive group insurance.

Will Companies Adopting the Breakthrough Plan Save Money?

While cost savings will be generated over the long–term, they are only one of the goals of the Breakthrough Plan. The plan will lead to increased cost awareness, because employees themselves will pay for medical expenses through their Personal Care Accounts. Long–term, cost efficiency is expected from the Breakthrough Plan, as consumers gain the ability to choose cost effective providers based on information provided, and as purchasers develop contribution strategies to encourage use of efficient providers. Cost efficiency may be achieved from plan participants using the tools provided to research treatment options to find the best available values. For example, Definity Health reports that participants in its consumer–driven health plans have above–average generic drug utilization rates, helping to reduce pharmacy costs by approximately five percent.

Employers are likely to adopt the Breakthrough Plan to keep their employees satisfied and healthy, by offering an innovative new benefit that addresses widely held concerns about existing health care plans. Such benefit plans are an important tool for employers to attract and retain key personnel. Over the long run, the approach is expected to impact the premium trend—currently expected to double over the next five years.

Is the Breakthrough Plan Similar to a Medical Savings Account?

While the Breakthrough Plan funds a Personal Care Account (PCA), it also supports consumers with full insurance coverage. The Breakthrough Plan is different because it provides unprecedented access to information consumers can use to evaluate care options and choose the best care provider for them. Also, the Breakthrough Plan fully funds preventive care with no copayments or deductibles, unlike most Medical Savings Account plans.

Will the Breakthrough Plan Be More Attractive to Younger, Healthier Employees?

We're not sure. So far, employees selecting Definity Health generally have average risk-profiles. For example, the current average member age is 42 with an average family size of 2.6. Definity has an appropriate share of high–use members, including participants suffering from chronic illnesses. The Breakthrough Plan's member–profile is expected to be similar.

Because Patients Spend Their Own PCA Funds under the Breakthrough Plan, Are They Less Likely to Access Preventive Care?

The plan is designed to encourage members to take maximum advantage of preventive care measures. Check–ups, immunizations/vaccinations, mammograms, and other preventive care examinations are paid fully by the health coverage feature—no copayments, deductibles or PCA deductions are required. In addition, through e–mail alerts and other strategies, the Tools and Resources feature continually reminds participants about the value of preventive care.

When Will the Breakthrough Plan Be Available to Consumers?

PBGH is currently finalizing plan details with Definity Health and presenting the Breakthrough Plan to its members. The plan will likely be customized by each employer and offered as an addition to existing health care options. It could be offered to consumers as early as 2002, but most of the large PBGH members considering it are likely to offer it in 2003.

Is PBGH Offering the Breakthrough Plan as an Insurer?

No. The plan will be available to PBGH member-companies through Definity Health, a Minneapolis–based provider of health benefits.

Are There Other Ways Definity Health Has Demonstrated Its Commitment to Improve Health Care Quality?

Beyond its own tools, Definity Health has demonstrated its commitment to quality by granting to PBGH a small equity stake. The value of this equity is restricted for use solely to promote the charitable purpose of improving health care quality in California.

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