How Employers Can Crack the Health Plan Code

Updated:

As the healthcare reform debate heats up, employers of all sizes are asking how they can provide meaningful health benefits to attract and retain talented employees as statistics show 88% of employees consider health insurance benefits when choosing a job. However, with the cost of employer-sponsored health care benefits expected to approach $15,000 per employee in 2019, employers are desperately seeking innovative and alternative ways to control costs and increase the effectiveness of the benefits they offer.

A recent study shows that Indiana had some of the highest healthcare costs in the nation. Our prices averaged 311% of Medicare and are increasing year over year, at a time when other states' costs were a fraction of Indiana’s. Almost all employers struggle with healthcare costs and find themselves out of options come renewal time. However, there are some innovative strategies that are now giving employers ways to start controlling costs and at the same time increase benefits for employees, including:

Direct primary care

Studies have shown that direct primary care leads to better overall health with fewer costly complications, hospitalizations and specialist visits, and lower costs for groups that have forms of self-funded health plans. Providing alternative options in which healthcare recipients can schedule same day appointments, visit an on-site or shared clinic, speak with their physician directly via phone, text, email or even schedule a telehealth call can help eliminate higher-cost alternatives. In addition, providing the opportunity for longer appointments or home visits can reduce referrals to costly specialists and hospital care and keep teams healthy, happy and more productive.

Direct relationships

While direct primary care may be the most well-known way of adding value by cutting out the middleman in healthcare, other direct contracting relationships can potentially have just as much impact on the bottom line. Much of this is being done through reference-based pricing, which circumvents the often high medical procedure pricing of insurance networks for pricing as a percentage of the Medicare reimbursement rate. Going even further, many employers across the country, with help from their employee benefits partners, are negotiating pricing directly with hospitals, specialists, and surgery centers in their area for procedures from colonoscopies to knee replacements. Solutions exist in the marketplace, but it takes champions within companies to bring these tools that seem outside the box into an employee’s benefits packages and lead to their adoption.

Stakeholder alignment

Making a group health plan work for employees takes assembling the right pieces in the right place. For companies that self-fund their employees' health and medical expenses, this can include a pharmacy benefit manager (PBM), stop-loss coverage provider and third-party administrator (TPA). However, the most important partner is the architect of the plan, the benefits consultant. The right benefits consultant with experience utilizing these strategies paired with incentives based directly on a business’s health plan performance, can make a huge impact on cost and satisfaction. They will make sure all the pieces of a health plan are working as a well-oiled, seamless system, and ensure a win-win for both the employer and employees alike.

As employee health and benefits continue to escalate in cost and plummet in satisfaction, companies can’t afford to rely on traditional approaches. Cracking the code now will help set the stage for happy and healthy employees and manageable healthcare costs in the future.

Jason Rutz is the partnership director at Freedom Healthworks.

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