Companies actually have a lot of control in managing costs; it isn’t easy, but it can be done. Here are a few things that companies of all sizes can implement to reduce their health care costs.
Implementing a rewards program is a simple way to lower your health care costs. Providing an incentive to use a cost-effective procedure or facility offers a substantial return. Employees often don’t realize that prices for health care procedures vary by 500% or more for most services until there’s money to be lost / gained. The same goes for medication and medical devices.
A simple rewards program can tackle the most egregious offenders by offering incentives, but more comprehensive plans can be put in place to handle even smaller, everyday medical expenses. We’ve seen return on investments of over 20x from some of the best programs. They need to be simple to use and accessible from anywhere to make a difference. Employees don’t want to handle a ton of paperwork to get their rewards and fraud is next to non-existent since the company employs them.
Offer an HSA-compatible plan
Health Savings Accounts (HSAs) are a financial product that can save employees money on medical expenses while reducing their taxable income. You can offer an HSA only by offering a high-deductible health insurance plan (HDHP).
As the name suggests, these plans have higher annual deductibles which means lower monthly premiums. Unlike Flexible Spending Accounts (FSAs), HSA balances roll over from year to year, so employees never have to worry about losing their money. For many employees --especially younger ones--these plans are a great value. These plans are also much less expensive for companies to offer.
Have employees develop an emergency plan
The worst thing an employee can do is wait until an emergency to take a look at their health care options. This happens all to frequently, and the financial impact to both the employer and employee can be huge. A simple exercise of having your employees figure out where they would go in the event of an emergency can avoid substantial financial heartache in the future.
The process is simple: have them figure out their local emergency room and in-network urgent care facility. As a final step, you should have them select a primary care physician (PCP) who is in-network. Employers should educate employees when it’s appropriate to go to each type of facility. To take it to the next level, plans should include telemedicine at low or no cost to employees.
Telemedicine allows employees to visit a medical provider live over the phone or video chat for immediate care, usually within 15 minutes. This happens without an appointment, travel or time spent in a waiting room. These medical providers are board-certified and can diagnose, treat and even prescribe for about 70 percent of typical medical visits that happen within the US. The majority of vendors provide service 24 hours a day, seven days a week; perfect for those middle-of-the-night visits.
Telemedicine in its current form has been around since the early 2000’s but only took off a few years after the release of the iPhone in 2007. The biggest issue with telemedicine until 1-2 years ago was low employee utilization. These days a new crop of providers have moved away from the single-siloed solution to making telemedicine a part of a complete employee health care experience. These health care guidance platforms that incorporate telemedicine have increased employee usage and have finally delivered a positive ROI that’s been long promised.
Get employees to quit smoking
Smoking cessation programs are a great way to lower your health care costs in the long term. Consider combining a program with a rewards component to compound their effectiveness. At GE, they increased the odds of quitting among employees to 15 percent, over three times higher than those not receiving an incentive in a pilot program. Nominal rewards work, even with something as addictive as smoking.
Move to self-funded from fully funded
A fully-insured health plan is a traditional way to structure an employer-sponsored health plan when a company is starting out. With a fully insured health plan, a company pays a premium to the insurance carrier, which handles everything including making a hefty profit.
With a self-funded plan, a company operates their own health plan with the help of a broker and a third party administrator (TPA). Companies take on more risk in the process but can manage this risk by buying stop-loss or excess-loss insurance. Once a company reaches an employee size of over 100, they should start considering going to a self-insured plan to save money and improve cash flow.
Like anything you buy that’s expensive, it’s a good idea to shop around every once in a while. If you are fully-insured, you might have been on your present plan for a while and prices might be out of line with your risk. You should consider having your broker present you with a few different insurance options and see if you get a better deal with another provider.
Get a new broker
Health plans are almost always purchased through a benefits consultant or broker. Some are better than others. In the last few years, there have been lots of changes within the industry and new technologies entering the marketplace.
Is your broker keeping up with the industry and introducing you to new ideas to reduce costs? Are they presenting you with the latest in health care guidance platforms or artificial intelligence? Are they bringing in fresh ideas to engage your employees with their benefits? What are they doing to help you lower your costs? A good broker should go beyond just creating an annual spreadsheet with a quote for insurance; they should bring you new solutions.
Implement a wellness program
Offerings in the “wellness” category are all over the map, and their return on investment can sometimes be hard to track, but that doesn’t mean you still shouldn’t investigate them. When it comes to wellness programs, less can be more.
Overly complicated and expensive programs might not have the desired outcome, but smaller initiatives can have a significant payback. One of the newer programs showing great promise is online behavioral health, addressing a huge untreated issue.
Add a health care guidance platform
Navigating the health care system is complicated and a single error can cost your company and your employee a ton of money. A health care guidance platform is designed to help your employees make better health care decisions. These platforms can vary by their offerings, but the best ones offer personalized services to your employees and are always available from a smartphone app. They should handle both inbound and outbound engagement campaigns that educate your employees and stay top of mind. Many even use advanced technologies like artificial intelligence to discover ways to save a company money by digging into health claims data.
Offer a health care concierge and nurse line service
People often get health care Concierge and concierge health care confused. Concierge health care is a relationship between a patient and a primary care physician in which the patient pays an annual fee or retainer. It’s reasonably expensive but gives you quick access to a doctor and maybe includes some other services. As an employee benefits offering, it’s costly.
Health care concierges or nurse lines, on the other hand, are benefits experts that help employees make better decisions. These services can be accessed via a phone number or as part of a guidance platform that’s available via a phone app. Phone-based systems tend to have lower utilization than those that are part of a guidance platform and are accessible anywhere while on the go.
Use cost estimator tools
Most health care services are shoppable, and prices for the same service can vary by up to 500 percent or more. Encouraging employees to use a price transparency tool can make a massive difference in what they pay for a service. The hardest part with these self-service tools is that utilization can be low; employees go wherever their doctor recommends.
These days, many doctors are part of a hospital system and will only refer people to services within these systems which are usually more expensive. To increase the utilization of these tools, they can be part of an incentive program. These tools can also be part of a Concierge service or health care guidance platform (or both).
Prioritize preventive care
Adding an extensive preventive care package can help keep employees from developing costly chronic conditions, some of which are extremely expensive to treat. According to the CDC, chronic diseases accounting for over 75 percent of the US health care spend can be avoided through appropriate preventive care. Benjamin Franklin was right when he said an ounce of prevention is worth a pound of cure.
Review medical bills
Stephen Parente, Professor of health finance at University of Minnesota who has studied medical billing extensively, estimates that 30 percent to 40 percent of bills contain errors. Providing a service where employees can submit their medical bills for review can save your company drastically. Many of these services can also help negotiate on an employee’s behalf and can get bills with errors lowered. These days almost every employee has a smartphone that can take a high-resolution photo in seconds, so there is little reason to not offer a bill review service as a stand-alone service or as part of a comprehensive health care guidance platform.
Over the last 50 years, health care costs have risen at eight times the rate of inflation for every other product or service. The costs of health care benefits are expected to skyrocket to nearly $15,000 per employee per year, according to the National Business Group on Health. To maintain a competitive benefits package over the coming years, companies need to ask themselves one question: How are we containing health care costs?
Health care is a complicated industry, and there isn’t a single solution to solve rising costs. A multi-pronged approach is the only way to tackle rising rates. While a single point solution can make a meaningful contribution to lowering costs, a better plan is launching a comprehensive solution that can tackle multiple avenues. When evaluating different vendors, evaluate the entire experience. Are you asking your employees to remember too many different vendors? Is it possible to consolidate these experiences? Can your employees access these services from their mobile phone while on the go?
Solutions exist to combat this rise, but it takes champions within companies to bring new solutions into an employee’s benefits packages and lead to their adoption. Check out the slideshow above for a few things that companies of all sizes can implement to reduce their health care costs.
More ways to curb health care costs:
Rick Ramos is chief marketing officer for HealthJoy.