You remember the old algebra formulas from school: 3X + 2 = 11. Solve for X.
Now you’re solving problems in the business world. If you’re in charge of health benefits, solving for “X” means: Solve for lower premiums. Solve for more choice. Solve for higher quality, more efficiency, and better adherence.
As these challenges continue in the age of post-healthcare reform, an approach that addresses all of these problems is to focus on the provider network. A targeted provider network may include a couple of specific health systems. They’re designed to offer coordinated healthcare with cost efficiencies in place, which can reduce your company’s premiums and healthcare costs.
Here’s a closer look at why some employers are moving to what we at Mercer call “Network Value Solutions,” a way to access effective ACOs and narrow networks in local and regional healthcare markets.
1. Giving Choice Back to Employees and Still Reducing Costs
One of the most frustrating moments an employee can experience on your benefits site is when she realizes her physician is no longer in-network. Now, she’s got to find another physician, change health plans -- if she even has that option -- or resign herself to high out-of-network charges.
With Network Value Solutions, you can return some of that choice to the employee. For example, companies might offer choice of a high-performing, narrow network of top-quality hospitals and doctors alongside a traditional PPO network from a major insurance carrier. If employees enroll in that narrow network, in some cases requiring a change to their preferred doctor or hospital, they will save and their employer will save -- up to 15% on gross costs. And not only does this solution lower cost, it supports the principles of consumers and rewards smart shoppers.
2. Reducing the Administrative Tangles
Two decades ago, regional, provider-owned benefit plans were a popular choice among businesses and employees. Then many of them faded into the background as employers chose to consolidate their medical plan options, because of increased administrative complexities, regulations, and completing tasks that had nothing to do with growing their companies.
But today these plans are returning to the scene as a new generation of health benefits solutions. Only this time, companies are working with expert partners who handle the administrative headache. The re-emergence of these players has injected more competition into the health benefits marketplace and added back employee choice. There is also the added benefit of brand recognition: a regional network can include marquee names that local patients know and trust.
3. Improving Quality and Efficiency
Accountable Care Organizations (ACOs) offer incentives to groups of providers to deliver coordinated, high-quality care that saves money. ACO’s used to serve only Medicare. Though the model is new, they are showing results. They saved Medicare $466 million in 2015 alone, according to the Centers for Medicare and Medicaid Services.
Now, the private commercial sector has jumped on board. For example, one insurer’s ACO product includes more than 4,600 physicians and serves over 300,000 covered lives in north Texas. Since becoming fully operational in 2013, this ACO has reduced 30-day readmissions, hospital admissions, and medical plan costs for its customers.
ACOs have been proven to:
- Lower wait times for patients
- Reduce hospital readmission rates
- Reduce health complications
- Save employers an estimated 5% to 15% on total healthcare costs
Network Value Solutions: A Versatile Option
Network Value Solutions has an added dimension for large national companies: Employees in numerous states can select regional networks, high-performing narrow networks, and ACOs that are available to them locally.
When it comes to health benefits, flexibility and choice will continue to challenge employers into the foreseeable future. Network Value Solutions, (currently only available through Mercer Marketplace 365), offer employers new options -- without new administrative burdens -- while controlling costs and improving patients’ health.