Reduce Healthcare Costs and Reward Your Employees

Employers are facing fewer options in the fully-insured arena. In absence of key data on medical and Rx claims, Ownership, HR, and Finance are left to wonder how to control costs. Armed with little insight into what is driving claims costs, and even less guidance on how to better manage existing claims, or lower the cost of treatment options, most recommendations on how to right the ship fall short.

The traditional solution from big brokerage houses when claims spike, and premiums increase, is to raise deductible, reduce coinsurance levels, increase co/pays on office visits and prescriptions, and introduce the idea of more restrictive 3-Tier networks. What the industry calls, benefit buy downs.

In the current environment, the employer is left with making punitive plan cuts that either increase employee payroll deductions, or enacting benefit buy-downs; that will likely punish the unhealthy employees by increasing deductibles, co/pays, and prescription drug costs at a time when income is strained.

Of course the company could absorb the rate increases, but most employers do not have the margins on products or services for this, and many, thanks to COVID-19, have seen their profits dry up, and this rough patch may last well into 2021.

Educating and training your employees to shop for care; the same way they make most purchasing decisions; comparing the pros and cons of a product or servcie, and making an educated decision based on the data. To accomplish this, the employee needs to begin to understand that the insurer is not "absorbing all the costs for their healthcare." The truth is...they are, alongside their co-workers and their employer.

The problem is workers have been trained by their physicians to ask few questions during the office visit, and accept referrals to a specialty care physicians for more tests and treatment. Specialist are often keen to recommended surgical options, or higher priced medications regiments; driving up costs for everyone.

What workers fail to take into account is that healthcare in the new millennia is more centered around revenue streams, and high quality patient care is often second fiddle. The task of searching for lower cost, higher quality care should not be left to the employee to seek on their own. This is where most traditional insurance carrier network tools fail; poor user buy in with little differnce to the out-of-pocket costs.

The shared goal between employer and employee needs to be: lower cost, higher quality care, with better outcomes. Enter the carrot.

By implementing tools to properly identify opportunities where employees could save significant expenses before they occur, the employee may begin to understand his or her options in advance of care. The employer may then offer to reduce the employee's out-of-pocket costs, for the employee simply agreeing to have the test or procedure performed where costs are lower, and there are fewer post-surgical complications, or higher quality.

The employee receives better care by being directed to a high quality, lower cost facility. In most cases, the employee would not know where the best outcomes are performed, or who the best rated surgeon is, becuase he or she is relying on the physician or specialist to refer them for more advanced treatment.

The employee retains the right to ignore the steered care advice, and pay regular plan deductibles and co/pays; most likely by seeking the care where their primary care physician or specialist referred them for treatment. The program is 100% voluntary, and there is no "penalty" for not cooperating.

A High Deductible Health Plan (HDHP) is the perfect match to this approach. Building an H.R.A. around the plan can lower deductibles and employee cost sharing, with greater plan flexibility, and this leaves room for incentivizing employees who better managed their own care for the benefit of the entire group.

There is a grand bargain to be struck. Employee's need proper instruction and the tools to learn the real cost of health servcies, and the employer must be willing to create the right incentives to reward cooperation. When employees better understand what drives increases and rate spikes, you begin to create the right culture for responsible utilization.

Innovative brokers are bringing measurable solutions to their client groups. The group insurance market is challenging, but with some diligence, education, and the right tools, there is a path towards better plan management through shared responsibility.