On Christmas morning, kids worldwide enjoyed presents and joy, never knowing what it took for parents to make Christmas morning a SUCCESS.
In Health Benefits, employers and advisers must STOP “hoping” Santa will come and bring them the present of higher quality and lower cost healthcare.
This is why we MUST focus on the 3 Cs: Cost, Consumerism, and Communication.
January is a month when most people make New Year’s resolutions.
Here are some stats that might alarm you but will put health benefits resolutions in perspective:
- U.S. employer healthcare costs are projected to increase 6.5% in 2023 to more than $13,800 per employee.
- 4% per-person cost increase for open-access preferred-provider plans in 2023
- Cost increases for most dental coverages are expected to reach 4%, driven by inflation across the U.S.
- The projected annual cost trend for outpatient prescription drugs is expected to reach double-digit levels.
Despite this daunting scenario, the following is good news. Employers can:
- EASILY get 10%+ in savings in the first year while cutting the annual trend by 50%.
- Save 30%-60%, per episode, in high-cost healthcare services using Alternative Reimbursement strategies
- Increase employees’ loyalty by 40% if their benefits are customized to meet their needs.
- Strengthen their employer-employee relationships by implementing effective health benefits modes of communication. Bottom line: RETENTION.
Resolutions should bring a change in mindset.
When you review 2022 strategies and outcomes…. how did you do?
Did you have a plan? Did you have strategies to lower your health insurance cost while improving the benefits?
What about your outcomes…were you happy with your renewal?
The real question is, what are you planning on doing in 2023 to achieve different results?
High-performing professionals and organizations will review what worked, and didn’t work, plan to achieve desired results, and consider a CHANGE to what they’ve been doing in the past.
This month we will walk you through proven strategies that worked and how a change in mindset can make the 3 Cs work for employers, employees, and their families in 2023.
Cost
On average, employers subsidize about 81% of the health plan cost making health benefits their 2nd or 3rd largest expense- typically only after employee salaries.
Employees in 2022 contributed about $4,412 for healthcare coverage, of which $2,520 were paid in the form of premiums from paychecks, and $1,892 was paid through plan design features such as deductibles, copays, and coinsurance, according to Aon.
What is the trend?
Employers of all sizes are looking to bolster their health benefit options in 2023 to improve recruitment and retention efforts. According to a July 2022 Mercer survey, employers will focus on affordability and access.
What is the solution? Alternative Reimbursements Advocacy, steerage, and incentives. Getting employees to the BEST care for the BEST cost and aligning their interest with the plan (the employer). It worked in 2022; it will work even more in 2023, especially when BOTH employers and employees face an inflationary period.
The “standard” insurance company plans DO NOT help employees get the BEST care, nor provide any incentives to help them, members, to be better healthcare consumers.
They, major health insurance companies, have NO incentive to do this… what employers call PREMIUM, insurance companies call REVENUE.
THINK how unnecessary these reimbursement strategies are; therefore, you're trimming some fat from the system.
NEWS ALERT – Higher quality and lower cost healthcare plans can be created without going through a large health insurance carrier.
Employers can achieve more competitive costs and superior service from providers using more direct and transparent arrangements.
How can you build a plan that waives member cost share while providing an advocate to help navigate employees, and their families, to the highest quality care?
Consider reimbursement strategies that employ alternate forms of payment, such as Direct Contracting, Bundled Payments, Referenced-Based Pricing, and Cash Payments, allowing the plan to waive the member cost share, resulting in a more expedited and streamlined collection method of payment for the service provided allowing employers to offer a better benefit to their #1 asset.
Consumerism
In a survey conducted by The Healthcare Conundrum in 2022, nearly 2,500 consumers found an alarming 56% backing out of scheduled medical visits over costs.
The population of people most likely to be canceling doctor appointments for financial reasons are those living paycheck to paycheck and struggling to meet monthly household expenses.
Imagine having to decide between your rent payment or your diabetic prescriptions, or an MRI on your hurt back… this is a reality for more than half of employees and their families.
Most employees believe employers don't act as a resource for health benefits-related questions.
Employers must take a leadership position and equip their employees to be better consumers.
Imagine deciding between making your rent payment or picking up a diabetic prescription. It is the reality for more than half of employees and their families.
Out-of-pocket expenses could be nearly 20% of their take-home pay.
A health plan's structure and design (copays, deductibles, etc.) are essential, but ensuring employees understand and correlate the differences between their healthcare decisions and what comes out of their pocket is 100 TIMES more important.
Employers need to become more educated about this correlation and the value that can be exponential.
Think about the correlation:
Employers WANT to keep their employees for a long time. Right?
If this is true, they should care about helping employees become better healthcare consumers, which helps keep them physically, mentally, and financially healthy.
RO has HARD and SOFT dollars benefits, and there is a 100% COI cost of INACTION.
Passing more cost to employees, who are dealing with absorbent cost increases in other parts of their lives, creates significant strain and discontent with their employer.
And the cost of replacing an employee can range from 50% to 400% of their annual salary.
Healthcare is a high cost for BOTH employers and employees. The employer can provide better benefits for a lesser cost but only with the employees' help.
Communication
2022 proved that communication saves money and lives. 2023 is the year to commit to better communication with employees, not a once-a-year flat brochure but instead using multiple ways and channels.
From the employers' perspective, only 19% believe their employees understand their health insurance benefits. Educating employees would help them make better healthcare decisions, reducing their costs and overall health plan spending.
Employers have diverse populations. Different types, and modes, of communication, allow people to “find” how they learn best, and a more personalized approach helps educate employees better.
Employers can SAVE money and lives when employees are more engaged. Employees who access better QUALITY healthcare are more appreciative of their employer and feel they CARE – INCREASING productivity and business results.
What is the GOAL of communication?
- Helping employees become better consumers.
- Solidifying the correlation between employees’ healthcare decisions and costs.
- To implement changes to the communication strategy in 2023 using what worked in 2022. These modes must be:
- Multifaceted – personalize it to the needs of your diverse population.
- Print-email-text-video
- CONSISTENT
Conclusion
Yes, the realities of 2023 look daunting. Yes, the approach requires creativity, thinking outside the box, and strategizing. None of these can be accomplished without a change in mindset.
The quote by Albert Einstein that made sense in 2022 makes the same sense in 2023: “Insanity is doing the same thing over and over, expecting different results.”
This new year allows us to align employers’ health benefits initiatives with their organizational goals to reduce costs, improve benefits, and recruit and retain the BEST talent.
Employers must arm themselves with the tools they need to educate their employees on how to be better health consumers.
Consumerism is not only about learning “how to buy a car, clothes, or grocery.
Let’s help families gain knowledge and action by learning more about accessing quality health with preventive care while lowering out-of-pocket expenses.
With the hands-off approach that advisers and most employers have taken with health benefits, communication will be an absolute difference in how an employee or recruit looks at their engagement with a specific employer.
Employers that invest in their employees by offering healthcare benefits that meet their specific interests, goals, and needs will lead to better overall health outcomes and business performance.
Let’s make these the overall business goals for employers and advisers to push in 2023. Focus the approach with these 3 Cs, and with a renewed mindset, we will succeed.
Resources:
