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Decision Support: Your Secret Weapon for Reducing Healthcare Spending (and Making Employees Happier.)

This free web guide will tell you everything you need to know about benefits decision support tools, which help your employees make more informed decisions about their benefits. Keep reading to learn what decision support is, how it reduces healthcare spending, and the five most essential benefits of decision support tools. You’ll also learn about the downsides of decision support tools, and seven questions you should ask potential decision support partners.

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The State of Healthcare Spending

Healthcare spending is out of control. The United States spends (per person) the most in healthcare (private and public spending) of any country in the world, and it’s not particularly close. Even in public spending, the United States spends the third most in the world. And it goes without saying that private spending is more than the other 11 countries combined.

 
Worldwide Healthcare Spending Per Capita
Healthcare Spending Increases Across OECD Countries

Not only that, but the costs are climbing rapidly.

America spends more of it’s GDP on healthcare, and it’s growing at a faster rate than any other OECD country.

And with our private-public healthcare system, employers like you (and your employees) are bearing the brunt of the annual increases in spending. In 2015, employers spent $11,750, per employee, on average. In 2020, that number was $13,720 per employee.

With these increases in healthcare spending, you would think employees are using their healthcare more and reaching good outcomes. But that’s not the case.

According to the Kaiser Family Foundation (KFF):

  • Half of U.S. adults say they or a family member put off or skipped some sort of health care or dental care or relied on an alternative treatment in the past year because of the cost, and about one in eight say their medical condition got worse as a result.

  • Three in ten of all adults (29 percent) also report not taking their medicines as prescribed at some point in the past year because of the cost.

The bottom line: Employers are spending more money on healthcare, and employees are more and more unhappy with their healthcare options.

 

Why Open Enrollment Fails

Employees find health insurance scary. Few want to invest the time to wade into the deep end and research the options available to them.

Employees struggle to do the mental math. It’s hard to estimate the impact that any given plan will have on their physical, mental, and financial health.

Employees procrastinate on benefits selection. Many
save selection until the last day of enrollment. In a passive- enrollment year, they stay on their previous plan even when better options are available.

Employees end up making selections based on simple criteria: either they pick the cheapest monthly payment or avoid plans (like HDHPs) because they don’t know enough about them, and the words “high deductible” simply scare them away.

Employees lean too heavily on the HR team. You may be fielding redundant questions, hosting the same types of meetings over and over, and sending your benefits guides ad hoc by request, even when you’ve previously sent them. You probably don’t have time to serve in this advisory role, even if you wanted to.

Employees pick the wrong plans. And when things go wrong, your healthcare spending balloons.

The bottom line: Employees are unhappy with the benefits-selection process, confused about their options, and HR teams pay the price.


How Benefits Decision Support Helps

A benefits decision-support tool guides employees to understand their healthcare insurance options and pick the right plan. Think of it as a virtual enrollment advisor: one that operates 24/7, on all devices, and only costs a few dollars per employee.

A good benefits decision-support tool will help predict your employees’ upcoming healthcare expenditures, assess their likely needs, and then calculate their estimated costs among their different plans.

A great one will lay out these options, along with their projected healthcare spending, into a straightforward comparison table that clearly indicates the best-value option based on their specific needs.

The bottom line: Employees are unhappy with the benefits-selection process, confused about their options, and HR teams pay the price.

Five Benefits of a Decision-Support Tool

They reduce anxiety and improve plan knowledge.

Decision-support tools fix the two most common enrollment uncertainties: what types of plans cover their most important medical concerns and the impact on their finances. When employees understand their options, including projected healthcare spending, they feel less uncertain about what any particular plan means for their physical and financial health.

A lot of employees want a self-guided experience and are reluctant to share medical information (for example: an upcoming pregnancy) with their employer. A decision support tool offers a way to get self-guided plan advice.

They serve as a virtual advisor to your employees.

Even if you have the bandwidth to serve as a benefits- enrollment advisor to each and every employee, it has downsides: you need to have an expert-level understanding of each plan option, and you risk blowback if things go awry with your employee’s medical costs. Some teams get around this by bringing in a specialized enrollment firm, which is an excellent option for organizations that can afford it.

But a benefits decision-support tool can take on this role and do it a lot more affordably.

They save both employees and employers money on healthcare spending.

When employees make the right plan decisions, they spend less money on healthcare costs (premiums + bills) overall. And when employees’ healthcare costs are well managed, so are yours.

They improve enrollment into HDHPs.

HDHPs sound scary. When employees look at health insurance companies as a combative force—which they do—they’re suspicious of HDHPs.

But we know that, for a massive segment of the employee population, HDHPs are the best option for them, by far; for young and health employees, HDHPs are a no-brainer.

The problem is that employees are misinformed about HDHPs and the significant savings that can come with them. They also don’t understand that they have risk protection built-in: the out-of-pocket maximum.

But a decision-support tool will lay out the economics for them, and, when employees see these financial numbers and the protection from maximum deductibles, the choice often becomes clear.

They save time and turn a typically scary process into an easy (and fun!) one.

The research and decision phase of benefits enrollment feels like an imposing process. Employees are looking
at dense benefits guides thousands of words long, with confusing terminology they don’t fully understand, and no clear way to predict their needs. It’s hard and takes a lot of time, which is why many employees don’t bother and just choose the one that sounds least bad at first glance.

But decision-support tools, with their predictive algorithms, can put all the most essential comparative information at their fingertips…and do it in just a few minutes.

Are There Any Downsides to Decision-Support Tools?

Look, we believe in benefits decision support. It is one of the most needed toolsin the healthcare industry. It simplifies benefits enrollment, makes comparing plans effortless, and helps employees make informed decisions that save them (and your company!) money.

But they are not perfect, and not every tool is created equal. Here are some disadvantages to keep in mind, especially if you’re evaluating different vendors:

  • They’re not free. If you have a razor-thin budget for open enrollment, then expenditures in one area require offsets in others. Now, many of these tools are cheap (our PLANselect tool, for example, averages less than $8, per employee, per year). However, they are proven to reduce overall healthcare spending, especially in organizations where HDHPs are available options.

  • They may not get used. “If you build it, they will come” doesn’t apply to enrollment resources. Your employees need to be made aware of their availability, and the employee user experience needs to be streamlined enough to actually save them time. Decision-support tools that require a 20- to 40-minute commitment from the employee will likely have lower engagement or completion rates.

  • They may not be accessible. Maybe all of your employees speak the same language (English) and sit at a desk with a desktop computer. But this isn’t the case for many organizations. If you have a multilingual organization or one where they may be accessing benefits resources on a mobile device, you should keep this in mind when picking a tool.

  • They may collect confidential information subject to HIPAA. Employees and employers should know some of these tools will ask for personal health information and have access to personally identifiable information, both could present HIPAA concerns. Besides the obvious risk of this, employees are also reluctant to provide this type of confidential information, further reducing utilization.

 

How to Choose A Benefits Decision-Support Tool: Seven Questions to Ask Yourself and Prospective Vendors

So you think a decision-support tool can help you support your employees while reducing your healthcare expenditures, but you’re not sure which one to choose? Here are some considerations.

But they are not perfect, and not every tool is created equal. Here are some disadvantages to keep in mind, especially if you’re evaluating different vendors:

 


1. Do you want to improve benefits literacy or drive smart decisions?

Every benefits decision-support tool will do both, but
this core question is where they begin to diverge. Some tools are more focused on educating employees on their available options, and other tools are focused on providing employees with an answer, i.e., which plan option is right for them.

  • Jellyvision’s ALEX tool, for example, focuses heavily on benefits education. This focus on education, coupled with the need for the employee to provide exhaustive medical records, creates an experience that is reported to take 30+ minutes for a lot of employees.

  • Flimp’s tool focuses more on the decision point, meaning our goal is to provide employees with accurate cost assessments of their options
    and get them to their plan comparisons and recommendations as fast as feasible.

2. What are your utilization and engagement rates?

Having a tool available to your employees doesn’t matter if it
doesn’t get used. Ask how they help you improve employee awareness of this new tool. Will they help you educate
the employees on its value? Make sure you also press for
accurate and defensible information around utilization and 5 completion rates. Our tool has an industry-high 60+ percent engagement rate.

3. What does the employee experience look like?

Get a demo. Go through the experience as if you were one of your employees. How would they feel about the tool? What are the upsides and downsides of the employee experience? You must see the value of the tool yourself before you determine how your employees will respond to it.

4. How do you calculate employee expenses?

Unsurprisingly, employees using a benefits decision- support tool are primarily going to make plan decisions based on their projected expenses for each plan offered. Typically, a tool will look at premiums, deductibles, co-pays, coinsurance, and other healthcare expenses to estimate your employees’ expenditures.

However, these predictions must be accurate. What is fueling their prediction model? How are they predicting healthcare usage? How are they factoring in regional-cost variations? What dataset are they using as a reference point in their model?



5. How accessible do you need it to be?

Accessibility is important for a lot of organizations. For your employees, it may be essential that benefits decision- support tool providers have built-in accessibility. That means multi-language support, multi-device support, as well as on-demand access for non-employees, like other family members who want to take part in the decision process.

6. What type of tracking and analytics do you provide?

What data will you receive from your decision-support tool, and how can you use this data to make decisions in the coming years?

You’re going to want to understand if employees are using the tool, how engaged they are, as well as analytics around plan recommendations. These types of analytics will help you understand which plan types were seen as strong fits for your employee population, which will enable you to adjust your benefits options in the future.

Some platforms will be able to provide you with enrollment data, or data broken down by employee segments, but this generally is going to require the collection of information subject to HIPAA; you’ll need to evaluate if that’s the right option for you.

7. What is the implementation process like?

There’s no standard process for implementation in this industry. Some tools take a few days, some take a few weeks, and some may take even longer. Who manages the implementation? These are important considerations, as you may be operating on a tight timeline with limited staff and reduced capacity for setting this up yourself.

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