4 Ways Employers Can Reshape the Health Benefits Market

Raise your hand if you’ve recently had a thoroughly positive conversation about healthcare in America, like one where people were smiling and talking about how great it is. No one mentioned the soaring costs, 3-minute doctor visits, confusing bills, or any other negative experience.

Right, thought so. As an employer, you may be asking yourself what can you do about it besides offer the best healthcare benefits you can.

But the truth is, employers are pivotal players in today’s healthcare system. Nearly two-thirds of all health coverage is employer-provided, which translates into a nearly one trillion dollar annual spend. Your purchasing power has clout.

Here are 4 ways companies like yours can help reshape the health benefits market in the years ahead.

1. Pay For Value, Not Volume.

Value-based care is a term used to describe a number of strategies for reducing unnecessary care and encouraging the practice of evidence-based medicine by changing incentives for providers and patients. These include accountable care organizations, patient-centered medical homes and other types of narrow networks.

Studies point to the large degree of waste in the medical system, and as employers look at ways to flatten the medical trend curve, eliminating waste seems a logical place to start. Comparing utilization and claims data from a given market with national averages will reveal issues that can be addressed with value-based care strategies:

  • Underuse: Is there too little preventative care, such as cholesterol and cancer screenings?
  • Misuse: Are there too many complications following hospital stays, and a high re-admission rate?
  • Overuse: Are there high numbers of procedures, such as knee and hip replacements, that may not always be necessary?

Value-based care can and should address these issues, improving the quality of care as it reduces unnecessary cost. But it also has certain entry costs for employers, such as care coordination fees and shared savings bonuses. All major carriers have agreements with value-based care providers, and if you’re self-funded, you’re likely already paying these added costs. To make sure you’re getting the greatest benefit, ask your carrier to be transparent about what you’re paying and what you’re saving.

2. Join The Drive To Better Quality.

Quality means providers are delivering the right care at the right time in the right setting, error-free. It seems obvious, but the American healthcare system is still moving toward that goal.

Medical errors seriously injure or kill hundreds of thousands of Americans every year. And analysts estimate 34% of U.S. healthcare spending is wasted on things like inefficiency, unnecessary procedures, and the cost of treating medical injuries that could have been avoided.

How can you help turn this around? Make sure your providers are delivering quality data at least annually. If their numbers don’t thrill you, you can:

  • Switch insurance carriers, or tie your contracts to higher-quality outcomes.
  • Structure your insurance plans in a way that encourages your employees to seek out the higher-quality providers in your network.

3. Personalize the Experience.

New technology is on your side in the challenge to engage employees in caring for their health. Here’s one example. Let’s say you discovered that 30% of your employees are smokers, and of those, most are between 20 and 30. Your smoking cessation program should offer:

  • a sleek digital interface
  • a buffet of online tools
  • high-touch counselors who email and text
  • rewards that appeal to Millennials, like gift cards

This kind of thinking can apply to medical providers, gyms, massage therapists—any business that provides healthcare to your employees. Hold your vendors accountable for achieving high patient satisfaction rates. Your employees are their customers.

4. Embrace Disruption.

As an employer, you’re in a position to inject change into the healthcare system. Don’t be afraid to do it, even if it creates short-term disruption. Those quality goals you demand could be surprisingly effective, even if it means you switch to new wellness programs, providers—or even insurance companies.

Keep tabs on your vendors to ensure they’re producing outcomes that align with your company’s objectives. Define your expectations, and agree to a cadence for measurement and reporting.

If you have a weight loss program, for example, expect that a certain percentage of your employees will actually drop some body weight. As any physician will tell you, even small changes on the scale can produce major health improvements.

Four Strategies, Multiple Benefits

A healthier workforce means more productivity and better engagement overall. Your company, and your workforce, has everything to gain when you help lead the transformation of the healthcare sector.  The bottom line—choose health partners that produce results. The expectation can create the reality.

Jean Moore
by Jean Moore

North America Health & Benefits Specialty Practice Leader, Mercer

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