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Consumer-driven HMO a step in right direction


Can consumer-driven health plan features be successfully incorporated into a health maintenance organization to form a new hybrid product?

We think so and are glad to see that California-based Health Net Inc. has done just that.

Enrollees in the Health Net Optimizer HMO, like a traditional HMO, must go to network providers to receive coverage.

Like a consumer-driven health care plan, though, enrollees have financial incentives to use health care services carefully. Among other things, enrollees can tap employer-funded health reimbursement arrangements to pay for out-of-pocket expenses, such as coinsurance for hospitalization. Unused HRA balances can be rolled over to pay for succeeding years expenses.

As Health Net's Chief Commercial Officer Mark Morgan noted, the hybrid plan is designed so that physicians, who are paid on a capitated basis, deliver cost-effective care, while enrollees also have incentives to use services prudently.

Is this an arrangement that will bring down health care costs? It is much too soon to say that. But the new product is a welcome example of the creative thinking going on, and we hope there is much more to come on the part of health plans to keep cost increases at more reasonable levels.