Editor’s note: This is the second part of a two-part exploration of the impact of benefits decision support on internal healthcare costs. You can read Part One here.
In the first half of this two-part series, we focused on the differing needs of the parties involved in the healthcare insurance system and the costs each incur. But benefits-decision-support tools and the data they provide can help to reduce costs and improve healthcare in unexpected ways. In this half, we’re looking at the impact of that data on both short- and long-term costs for everyone.
Data Deep Dives
If transparency is good for the worker, it’s also good for the employer. The more you can uncover about your benefits and the more you can link them into an integrated benefits-decision-support program, the better. The one thing virtually everyone in the insurance business says is that an integrated approach is vital to success.
“When medical, pharmacy, dental, vision and disability care are seamlessly connected and the full power of integrated data is unlocked — including member claims, population insights and employers’ health management programs — healthcare providers have access to a complete picture of employees’ health and well-being in a format that is easy for multiple providers to access and interpret. Instead of walling these services off in a silo, they are integrated into one system, allowing for the optimized collection and sharing of key, actionable information.” – Nick Brecker of Benefits Pro
Once you know these things, you’re able to identify the drivers of cost increases. This lets you make better purchasing decisions, weighing the cost of an individual benefit against the value of its purchase, helping to personalize your benefits-decision-support tool. Gallagher Area Vice President Joe Roberts wrote in Smart Business, “[E]mployers should analyze the implications of favoring one type of medication over another. Direct costs may be lower in the near term, but the loss of rebate could mean paying more over time.”
The healthcare market isn’t static. Change is part of the deal. Working with the insurance provider and communicating regularly about market conditions allows you to address changes in a way that retains the integrated approach you’ve developed. In other words, the analysis never ends. When all this is built into benefits-decision-support tools like PLANselect®, employees have access to a truly powerful tool and can make choices that can optimize health outcomes and minimize associated expenses.
The Zero-Sum Fallacy
The relationship between insurer and insured is often seen as a zero-sum game; what one gets the other loses. But, in healthcare, that isn’t true. A partnership can be built that benefits everyone in the transaction.
It’s been said that the US doesn’t have a healthcare system but an illness-care system. We’re good at healing the sick, but we aren’t as good at keeping people healthy in the first place. Change that, and the entire equation changes.
Suppose you focus more on wellness. Many insurers are willing to help you pay for that. If your workforce is healthier in general, the insurer is less likely to have to pay out on claims. Consider adding gym memberships, weight-loss and stress-relieving programs, and regular free checkups to your benefits offerings. Benefits like these can add up to a cheaper long-term policy for insurers, and they can pass the savings on to your company – if they have the data to support it.
Target specific health problems. Diabetes is reaching epidemic proportions, but a targeted approach, as championed by Stephen Miller on SHRM, can help. “A targeted program for people with diabetes, for example, might offer both coaching and an interactive glucose monitor that can transmit data to a provider. Success is measured in improvement in the quality of life and fewer trips to the emergency room.”
Obesity, which is often tied to diabetes, is another problem. According to Entrepreneur.com,“A 2007 Canadian study found that obese employees are absent on average 13 times more than non-obese employees and incur almost seven times as many medical claims costs.” The site also noted, “In 2015, the US Centers for Disease Control and Prevention reported that productivity losses linked to absenteeism cost employers $1,685 per employee.”
One of the areas I personally believe to be underserved is mental health. I’ve seen people with depression and bipolar problems develop physical health issues that ended badly, and expensively. “As of 2014, most individual and small group health insurance plans, including plans sold on the [ACA] Marketplace are required to cover mental health and substance use disorder services,” according to the government’s official site.
Why It’s Worth It
If you’ve done your data deep dive, you’ll be able to separate the wheat from the chaff and choose the plans and benefits that are most cost effective. Some years ago, the British Minister of Health explained that Britain’s National Health Service covers everyone but not everything. The same should be true of your employee health benefits. Demand for healthcare is potentially infinite, and your resources most assuredly are not.
It also must be remembered that a healthy workforce is more productive than a sickly one. Spending more to get better health outcomes can be a profitable move long term. The World Bank says, “There is a robust body of evidence showing that investment in workplace wellness programs is not only good for employees but also for the bottom line of companies. These programs, which are employer-organized and sponsored, help employees, and in some cases, their families, adopt and sustain behaviors that reduce health risks associated with chronic diseases and injuries. Both employees and employers value these programs because they help reduce health risks, absenteeism and employee turnover.”
About 15 years ago, the Parnassus Workplace Fund started investing in companies that “genuinely cared about their employees as people, not just hired hands.” Also, “Since the fund’s inception (April 2005-January 2013) it’s had a 9.63% annualized return. This compares to the S&P Index which has earned just 5.58% during the same period.”
The Triple Alliance
There are three parties involved in the health benefits field: the insurer, the employer and the employee. If you look at this as a zero-sum game, the relationship is going to be one of conflict. Creating a symbiotic partnership should be the goal. It creates greater transparency, it empowers the patient while giving them the resources needed to be a smart healthcare consumer, and it creates an environment where change is managed. And it all works smoother when benefits-decision-support tools are part of the equation.
