“Not everyone embraces new ideas,” Billy Bridwell said to a packed room as the first sessions of the BenefitsPRO Broker Expo kicked off. Bridwell, vice president of benefits for Keystone Insurers Group, along with Reid Rasmussen, co-founder and CEO of freshbenies, were covering one of the most important topics for today’s brokers and agents (and their clients): cost-containment strategies.
Eight years ago, he explained, many brokers opted to take a wait-and-see approach to the implementation of the ACA. Even in the last year, many in the industry have sat idly, waiting for more change to direct their actions.
The “wait and see” approach hasn’t been as popular with employers and consumers, however, as medical costs continue to rise. Over the past four years, employees’ out of pocket costs have increased an average of $1,000 per year, Rasmussen said, and while the recent tax reform purports to put $1,200 to $1,600 more back in the hands of the average worker, it’s hardly enough to cover these increases.
So what are brokers to do?
“We need to see things from a different angle, change the conversation,” Bridwell says. And over the course of the next hour, Rasmussen and Bridwell identified seven broad categories where brokers and their clients can focus their attention to make real differences in medical costs.
Contain high medical costs
Or more accurately, take accountability for high medical costs. Strategies such as self-funding, reinsurance, plan design and case management can be used to bring down the curtain between medical bills and usage and help employers understand where their dollars are going and better control those claims.
The discussion of self-funding is no longer about the size of the group, Bridwell said, but the makeup of the group–who are they and what is their level of risk?
The duo addressed the role of smaller networks, reference-based pricing, incentive programs and HRAs in taking control of costs, recognizing that such tools face a lot of resistance from both consumers and medical providers. “You have to know when to use it and how to implement it,” said Bridwell. Moreover, it’s not an instant change; it’s going to be an ongoing, incremental process.
(In-country) medical tourism
Convincing a consumer to go to India for an endoscopy might be a tough sell (at least for now), but there is plenty of opportunity within the U.S. borders to “shop around” for care. These options include high-performance surgical centers or specialty clinics that benefit from certain medical economies of scale.
Key to their success, Rasmussen emphasized, is concierge support–a person with knowledge of the individual’s insurance plan who can help direct them to the best care for the best value.
“All an employee has to remember is an 800 number and a zero (dollar deductible.” Bridwell said. “If you incent them right, they will absolutely follow.”
Pharmacy makes up 20 percent of medical premiums, and the drug industry has been in the spotlight for its pricing practices in recent years. That doesn’t mean brokers and their clients have to accept the status quo, however. Outside PBMs, transparency tools and analytics can be used to zero in on cost savings in pharma spend.
Develop consumerism habits
Consumer-driven health care isn’t a new concept, but the execution has been lacking. “Brokers made these tools available, now we muse teach how to use them,” Bridwell said, noting how ineffective programs like telehealth, HSAs or wellness programs are if neither an employer nor employee actually knows how to utilize them.
No discussion of cost-containment would be complete without a nod to technology, Rasmussen said, noting consumer-facing apps and tools as well as broker-facing analytics.
Non-medical “gap fillers”
Something of a catchall, but by no means an area to be overlooked, this includes products such as life insurance, accident or critical illness. When evaluating this area, the focus should be on how to lower the consumer’s out-of-pocket costs.
“It’s 2010,” Bridwell said, bringing the session full-circle. “In 2010, people thought health care reform would go away. Those people aren’t in this room. We’re at the very front of this movement to understand and implement all of these things.