HOW EMPLOYERS ARE USING THE INTERNET TO MANAGE HEALTH BENEFITS: THE EHEALTH PROMISE

Health2 Resources, August 13, 2002

How Employers are Using the Internet to Manage Health Benefits:
the eHealth Promise

A summary of report findings


Each minute, millions tap into the Internet to shop, communicate and learn. In little more than a decade, the Internet has become the emerging communications tool for business to both expand its reach without and streamline tasks within.


What the Research Shows

Studies show that between 64 million and 100 million American adults have used the Web to access health information. That interaction has a direct bearing on decisions users make about health care and the communication they have with doctors. An earlier study indicates 92 percent of consumers consider health information found during an online search "useful," and 81 percent report they "learned something new." A startling 47 percent of those surveyed said they used material found online to make decisions about health care.

At the same time, accuracy and quality of health care information on the Web varies substantially. Both the Commonwealth Fund and the California HealthCare Foundation found that standards are needed to ensure consumers understand the limitation of sites, and that they get information that is accurate, useful and evidence-based.

Clearly, consumers are looking for information on the Internet about specific diseases, treatment options, and even about the quality of caregivers. The Internet is also influencing how consumers manage their health and how they make treatment decisions.


Employer Use of the Internet: Response of Coalition Leaders

In the Fall of 2001, Health2 Resources, a Washington-based consulting firm, surveyed member coalitions of the National Business Coalition on Health to determine current and planned use of the Internet to manage health benefits. Coalition executives were asked to respond on behalf of the 7,000-plus employers they represent nationwide.


Understandably, rising health care costs are at the forefront of concern to benefit managers. Coalition executives reported that employers use a combination of (1) benefit plan design, (2) care/clinical management, and (3) consumer education to manage health benefits. Respondents reported that "modifying benefit plan design" is the current strategy used by employers most often to manage health care costs, but they indicated the most effective strategy was a combination of plan design, disease management and educating employees about their health.

While a large majority (77 percent) of coalition executives reported the Internet will become an important tool for managing health care benefits within the next three years, they did not believe the Internet was the most effective tool to manage health care cost - it was rated as the least important tool in saving an employer money.

While 40 percent reported members already using the Internet for online enrollment and benefits management, close to 70 percent felt the highest current use of the Internet among member companies was for health and wellness information. We believe this reflects the widespread perception that consumers already use the Internet to obtain personal health information, whether on or off the job.

Many of those surveyed (56 percent) said they believe employers will use the Internet in one to three years for member plan choices and to educate employees on the use of the health plan. Clearly, administrative functions are seen by coalition leaders as the first Internet applications employers use, with disease management functions considered later steps. In fact, coalition executives ranked the most important functions of an Internet-based health administration system as follows:
(1) Enrollment
(2) Administrative support
(3) Benefit selection and changes
(4) Eligibility determination
(5) Defining plan information
(6) Tracking claims and benefits

When asked what employers should consider in moving forward with an Internet-based benefits administration strategy, responses included:
(1) Access and ease of use;
(2) Company culture;
(3) Confidentiality;
(4) Accuracy and quality of vendor information;
(5) Financial stability of the vendor;
(6) Demonstrable cost savings above and beyond training and technology costs.


On-Site Assessment of eHealth

Health2 Resources then visited four large corporations already using Internet applications to administer and enhance health benefits management: General Electric, AOL/Time Warner, RR Donnelley & Sons and General Motors. The site visits sought to
examine what motivated each company to embrace an Internet strategy, the company's strategic focus, vendor expectations and "lessons learned."

The site visits amplified the idea that the Internet is the ultimate tool for adapting information to suit a company's goals, culture and needs. Since no two companies are alike, each interview revealed the unique steps taken to assess needs, seek potential partners and integrate Internet functions with existing benefit structures.

Three common considerations arose from the interviews as important assessment points:
(1) Scale: Can the vendor provide all the services that an employer desires, from transaction-based services to disease management?
(2) Capitalization: Does the company have the resources on hand to do the job now, and in the years to come?
(3) Content knowledge: Is the content current, high quality and without bias?

It should be noted that each site's corporate culture strongly supported use of technology in all operating areas as a tool to gain efficiency and streamline operations.


Conclusions

While the Internet is a vast resource for health information and an unparalleled communications tool, there exists a clear division between its use for practical, transaction-based administrative capabilities and its still largely untapped potential for disease and care management.

Employers are skeptical about the Internet's usefulness as a cost-saving tool. In its short lifespan the Web has already experienced a traumatic business cycle. Traditional business leaders are only now testing the waters for Internet-based health care applications, beginning with administrative functions which they hope will lower costs and improve service.

As Internet companies demonstrate both stability and potential cost savings, more businesses will venture deeper into Web-based applications such as company-approved health information portals and disease management. Since Internet access is increasingly becoming less of a barrier for workers, the eHealth question of "if" has transformed into "when" and "which vendors" will lead the way with "what" applications employers will adopt.


For more information on vendor expectations and vendor preferences covered in the report, "Employers Use of the Internet in Managing Health Benefits- the eHeatlh Promise," contact Health2 Resources at (703 )319-0957. For information on the National Business Coalition on Health, go to www.nbch.org.