Health Benefits: 3 Lucky Charms ☘️ Strategies

Is the Luck O' Irish on your side?

One place you don't want to test your "luck" is with the health, physical or financial, of employees and their families.

Current realities:

• More people are on high-deductible health plans than last year- most can't afford to use them.

• Traditional, big-name carrier offerings remain the "norm"- as if those have been achieving good results.

• Employers say they would consider actions to control costs and quote "increasing employee contributions" as the most common strategy to lower costs- as if that's making them an employer of choice.

• Out-of-pocket costs, especially around prescription drugs, are bankrupting our nation- 67% of bankruptcies are filed due to medical expenses.

So, what's your strategy: are you waiting for "Lady Luck" or "fighting" like the Notre Dame football team?

March's battle cry is to STOP TRYING TO GET LUCKY at finding ways to lower health benefit costs.

Instead, employers, and their advisers, should look to protect employee and their personal “pots of gold” by being proactive versus “hoping” for triples 7’s.

Only the major insurance companies have hit the “jackpot” and built up their pots of gold in the current game of roulette.

This month we will showcase three (3) proven strategies for lowering healthcare and health insurance (YES, they are different):

Financial hard knocks:

A Mercer study had employer medical plan costs increasing 5.6% for 2023:

• $13,800 is the new per-employee annual costs paid by employers in 2023, according to a recent Aon study.  
• On average, workers are paying $6,106 for their coverage.
• 56% of Americans now say inflation is causing financial hardship for their household. 
• 32% of adults have paid a bill late in the past six months, according to a recent report by LendingTree — and 61% of them said it's because they didn't have the money to cover the cost.

In 2023, organizations will face significant challenges:

• A competitive talent landscape.
• An exhausted workforce.
• Pressure to control costs amid a looming economic downturn.

How employers respond could determine whether they are an employer of choice…

Where do you start? DATA. 

1. WHY USE DATA 

Data is power. 

What we don't measure cannot be managed or improved. 

The above stats are proof of why data is key for health benefits.

While your company likely captures and analyzes data about everything from your website's performance to travel expenditures, you probably have little to no data for your health benefits- One of your TOP 3 expenses.

This negligence could be costing you. A study from Willis Towers Watson examined the practices used by companies with high-performing benefits strategies.

Among top-performing businesses, 53 percent were using data to analyze their health benefits, compared to 34 percent of other firms. 

The study found that top-performing companies spend, on average, $3,548 less per employee on health care than other companies just by using DATA.

With the right data in hand, your business is better able to:

• Encourage behavior change. Data can show where plan participants opt for expensive name-brand prescriptions over cheaper generics or use emergency rooms for urgent or routine care. You can then educate employees and adjust their benefits plan to drive them toward more affordable options. 
• Mitigate risks. Analysis of current healthcare expenditures can help you pinpoint the most common or expensive diseases and conditions in your workforce, such as diabetes or hypertension. You can then provide tailored resources to help your employees better manage their health conditions, preventing them from escalating into costly medical emergencies.
• ADD QUALITY and COST statement instead of “wellness”. 

WHY IT MATTERS

EMPLOYEES ARE CONSUMERS. Your employees know the value of shopping around.

They do it themselves EVERY SINGLE DAY.

• Consumers, such as EMPLOYEES, spend an average of 79 days researching before they make a significant purchase.
• Yet, once a year, employees are expected to check a box to determine how much they pay for their most critical purchases. Employees trust their employers have chosen a health benefits plan that won't leave them second-guessing whether they should get needed care.

DATA & ANALYTICS. One of the most powerful ways employers can build effective benefits programs their employees want is by developing a data and analytics strategy that shows exactly where their money is going. The exact people to help support and bring advocacy.

2. WHY FOCUS ON SPECIALTY

U.S. businesses continue to spend a monumental amount of capital on specialty drugs for their workforce. 

Specialty drugs were estimated to represent about 50 percent of total Rx spending in 2020, with an inflation of about 23 percent from the previous year. Despite these prescriptions accounting for most of the overall spending, specialty drugs only accounted for 2% of total prescriptions. 

Luckily, there are a few ways to reduce the overall cost of specialty drugs. 

Patient assistance programs (PAP) are one of the top ways to achieve this. 

What are Patient Assistance Programs?

Patience Assistance Programs are available through select pharmaceutical companies and certain state and non-profit entities. Programs are designed to lower the cost of expensive but vital drugs- most of which are life-changing.

Depending on the program and patient, many specialty drugs can be made FREE to employees or their family members.

How Do They Work?

The benefits of these Patient Assistance Programs vary widely between programs. There are also varying requirements and enrollment processes for these programs. 

Once a patient qualifies for a specific PAP, the application procedure will be listed on the organization's website. Alternatively, you can call or email them for more information. Additionally, organizations have created advocacy support to help employees navigate the application process and ensure a higher success of value.

While not all prescription drugs have a PAP program, many of the highest drugs on an employer’s top spend list will have a PAP program, yielding HUGE savings for both the member and the employer.

Patient assistance programs should be a TOP priority when considering reducing Rx spending.

Another strategy to help control Specialty Drug costs is International Sourcing.  

What is International Sourcing? 

With pharmacy expenditure approaching $400 billion per year, employers are desperately searching for ways to reduce their Rx spending efficiently. 

International Sourcing is a method used on a personal level for many years. 

However, many U.S. businesses are starting to employ this strategy to decrease prescription drug spending for their entire workforce.

WHY IT MATTERS

• International Sourcing Cost Savings. While it’s still unclear on a macro level, the savings potential of International Sourcing is very often a no-brainer on a specific drug comparison. For example, the cancer medication Gleevec costs nearly $150,000 in the United States, while in Canada, the same drug only costs $38,000.
• Reward good behavior. Since you could talk, you've been living in a world that rewarded good behavior. As a child, you got an allowance or didn't get your butt whooped when you got good grades or made your bed. Even today, your auto insurance premiums are lowered for good driving performance--- the CARROT vs. stick approach has always achieved the desired result

So, how do we get employees, and their families, to make better healthcare "purchasing" decisions?  

YOU ENTICE THEM.  

Yes, you read that correctly. Aligning the interest of the people who make the healthcare decisions (EMPLOYEES) with the entity that pays most of the bill (EMPLOYERS) will impact results and immediately impact both the cost and the quality of care being accessed.  

LET'S GO DEEPER: EMPLOYEES

• According to the website "Affordablescans.com," MRI costs in Chicago range between $256 - $5,468 based on an analysis of 18 imaging centers in Chicago, Illinois. Self-pay patients pay as little as $256, while high-deductible patients pay between $2224 - $5468 for the MRI scan.
• Nearly 60% of employees in the U.S. have a high deductible plan. With this, would you want an employee paying $250 or $2,500 for the SAME MRI? It is a no-brainer. 

The real question is, HOW ARE YOU HELPING THEM? 

• The scary part for employees today is where they find the money to access care. With the rising costs of eggs, gas, and other everyday needs, helping employees save on their healthcare costs is not a luxury but a necessity.
• Although health insurance is available to employees on paper, the threat of medical debt, or worse, bankruptcy, can prevent members from using that insurance and getting health care. 

These employees can be considered functionally uninsured. 

LET'S GO DEEPER: EMPLOYERS

Dr. Cristin A. Dickerson from Green Imaging states that nearly 40,000,000 MRIs are conducted in the U.S. annually. For employer-sponsored plans, 118 MRIs are completed for every 1,000 employees.

• It means an employer with 1,000 employees; their MRI cost could range from $141,600 to 236,000. Moreover, and even more important, their employees could have spent 50,150 to 70,800 for these same MRIs.
  • In the above MRI example, employers should consider waiving employee costs. 
    “The additional benefit to the employer is that these exams do not go against the deductible when the cost is waived, so the patient does not meet their deductible with a single MRI, meaning the plan would pay all subsequent costs,” added Dr. Dickerson.

YES, FREE. 

If the employee goes for an MRI at an independent free-standing center, the costs will be a fraction of what the same scan would cost in the hospital. 

If an employee is educated, they will save money choosing a lower-cost alternative, increasing the likelihood of that employee thinking twice before choosing an MRI provider. 

The same strategy applies to all healthcare services as well as prescription drugs.  

3. REWARD GOOD BEHAVIOR

How do we get employees to make better decisions?

INCENTIVES.

Incentives need to be the foundation of an employer's health benefits strategy. WHY?

Quality vs. Cost

Not all providers are created equal. Some have more experience with specific populations.

Others have specialized training. 

Others have low-quality scores and lawsuits against them. 

However, with traditional insurance, none of these factors are as important if they are "in-network."

"In-network" means a doctor or provider has agreed to terms with the insurance company. 

It doesn't mean they are the best quality provider or even the lowest cost. They're just "in-network."

Regarding healthcare, cost, and quality have an inverse relationship — the higher the cost, the lower the quality of care, and vice versa. 

How can this be?

Think of it this way. If you have the choice between two surgeons to conduct a hip replacement, would you want one that specializes in orthopedics, conducts 100s of hip replacements per year, works with a consistent team every day and has all of the latest equipment OR a “generalist” who might spread his/her time between gallbladders to cyst removals and dabble in orthopedics…easy answer, huh 😊

The good news is, often, the dedicated specialist is also CHEAPER.

Employers can align the interest of long-term, sustainable healthcare costs by providing incentives for employees to become better healthcare consumers. 

How do you get your employees to choose these excellent providers? By keeping them educated on the following:

• Transparency. Expose providers that provide lower-quality services or charge higher prices. It could reduce the volume of employees coming in their doors.
• Improve recruiting and retention. You've already invested time, money, and effort into designing your benefits package. 

A healthcare guidance platform and communication can help employees make the most of their existing health benefits and ensures they get the most out of those investments.

• Reduce health care costs while improving quality of care. Often, employees choose expensive or inappropriate care options because they don't know any better. 

With the right guidance platform, employees can find the best doctor or facility for their specific needs, receive more appropriate care, and save money by seeing the right provider in the right setting.

• Increase employee engagement by alleviating health-related stress. Providing a solution that helps employees navigate difficult health situations gives significant peace of mind that they're making the most intelligent, care-focused decisions, helping them stay engaged at work.
  
  

BOTTOM LINE

• Employers must rely on something other than LUCK to lower health benefits costs. Become the leprechaun who finds the coins at the rainbow's end and saves tons of money. 
• The cost of healthcare "feels" different between the two employees. A $2,000 bill from a hospital is no big deal for a Wallstreet banker but would bankrupt your average hospitality worker.
• Traditional health plans will not lower their premiums. We can bring change within the broken system when we: 
  • Use Data to make better-informed decisions about health benefit plans.
  • Focus on lowering specialty drug prescriptions for those employees who need it the most through Patient Assistance Programs (PAP).
  • Incentivize employees to use higher quality providers to lower costs.

Resources:

(n.d.). THE COST-SAVING POWER OF HEALTH CARE DATA. NextGen Benefits. https://nextgenthb.com/employers/the-cost-saving-power-of-health-care-data-2/

(n.d.). INCREASE WORKER SATISFACTION BY TAKING CONTROL OF HEALTH BENEFITS DATA. NextGen Benefits. https://nextgenthb.com/employers/increase-worker-satisfaction-by-taking-control-of-health-benefits-data/

Jones, J. M. (2022, September 7). Inflation Now Causing Hardship for Majority in U.S. Gallup. https://news.gallup.com/poll/400565/inflation-causing-hardship-majority.aspx

Davis, M. (2022, October 3). Amid Rising Inflation, 61% of Americans Who Paid a Bill Late in the Past 6 Months Say They Couldn’t Afford It. Lending Tree. https://www.lendingtree.com/personal/late-bills-study/

(n.d.). USE ANALYTICS TO PREDICT AND REDUCE COSTS. NextGen Benefits. https://nextgenthb.com/employers/use-analytics-to-predict-and-reduce-costs/

Dickler, J. (2022, October 10). ‘Life is getting more expensive by the day.’ Amid inflation, 32% of Americans are struggling to pay their bills. CNBC. https://www.cnbc.com/2022/10/10/inflation-is-causing-more-americans-to-fall-behind-on-monthly-bills.html

(n.d.). (2022, October 10). DO PATIENT ASSISTANCE PROGRAMS WORK? NextGen Benefits. https://nextgenthb.com/employers/do-patient-assistance-programs-work/

(n.d.). (2022, February 1). How much does MRI cost in Chicago, Illinois | Best rate: $256. Affordable Scan. https://affordablescan.com/mri-scan/cost/illinois/chicago

DeMarco, J. (2023, January 30). Rate of Workers Enrolled in High-Deductible Health Plans Jumps for 8th Year in Row to Record 55.7%. ValuePenguin. https://www.valuepenguin.com/high-deductible-health-plan-study#:~:text=As%20of%202021%20(the%20most,2013%20and%2062.6%25%20from%202012

Blachek, J. (2022, August 4). The negative spiral of high-deductible plans. BenefitsPRO. https://www.benefitspro.com/2022/08/04/the-negative-spiral-of-high-deductible-plans/#:~:text=High%2Ddeductible%20plans%20are%20a,requirements%20set%20by%20the%20ACA

Vivero, D. (2020, November 10). How employers can help employees make better health care decisions. BenefitsPRO. https://www.benefitspro.com/2020/11/10/how-employers-can-help-employees-make-better-health-care-decisions/

Miller, S., CBES (2019, February 27). 15 Ways Employers Can Reduce Health Care Spending That Aren’t Cost-Sharing. https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/top-ways-employers-hold-down-healthcare-spending.aspx