Health care plans are consistently rising in cost while decreasing in quality, and businesses and workers alike are feeling the impact. Benefits advisors are looking for ways to combat this trend, and one of the most effective ways they can do so is by managing the health care supply chain.

The concept of a supply chain is present in virtually every industry, but it's often ignored in health care. The overall idea is the same, but instead of focusing on sourcing, production, storage, and transportation of goods, the health care supply chain centers around the choices involved in the diagnosis, treatment, and recovery of a patient. By taking control of the health care process from start to finish, your advisor can give your employees better quality care and more options while creating savings for everyone involved.

Reduced costs for you and your employees

Premiums rise every year, and both you and your employees are stuck paying the hefty price. The Henry J. Kaiser Family Foundation (KFF) revealed some alarming numbers in their 2017 Employer Health Benefits survey:

The average annual premium is $6,690 for single coverage and $18,764 for family coverage.
Single-coverage costs rose 4 percent and family-coverage costs rose 3 percent from 2016 to 2017.
The average employee pays $1,213 for single coverage and $5,714 for family coverage every year.

Managing the health care supply chain from beginning to end is a relatively simple way to mitigate these costs. For example, it's commonplace for insurance companies to send patients to hospitals for any type of surgery. But the Society for Human Resource Management (SHRM) reports that knee arthroscopy patients could save almost $1,300 in out-of-pocket costs if they choose to get their procedure done at an outpatient surgery center instead, and if you're self-funding your employees' coverage, you could save up to $5,100 as well.

Personalized health care options

The status-quo health care supply chain is pretty straightforward: Patients go in for a consultation, visit a specialist, get treated, attend follow-up appointments, and get a post-care referral. While the steps in this process don't vary too drastically on a case-by-case basis, managing the health care supply chain can give you and your employees more options to develop a health care strategy that works best for everyone involved.

This expansion of choice begins from the moment your employee starts to feel unwell. If they decide they don't want to spend the time traveling to their nearest primary care physician's office, they can opt for a digital consultation in their own home, which not only provides more convenience, but can also offer an average savings of $126 per visit, according to research by Red Quill Consulting.

Health care supply chain management also enables you to work with your employees to find treatment options that satisfy both of you. For example, your advisor might suggest recommending a less expensive (but equal quality) treatment center to your employee that happens to be a bit farther away than the one closest to their home. In exchange for their willingness to travel, you might offer to cover their co-pay. Methods like this give you the potential to save money while giving your employees more control over their health care choices.

Equal or better quality care

More expensive benefits aren't always better benefits. A 2013 study by the National Center for Biotechnology Information (NCBI) found only a "small to moderate" association between health care cost and quality, and many options that can be offered through managing the health care supply chain can give your employees the same quality care for less.

In fact, the most expensive and invasive steps of the health care supply chain aren't always necessary in the first place — a study by USA Today revealed that between 10 and 20 percent of all surgeries may actually be unnecessary, with cardiac procedures, spine and knee surgeries, and hysterectomies being some of the most common operations that are performed "more often than needed."

If your employee has a knee problem, the status-quo health care process might see them undergoing a painful, expensive, and invasive surgery that could keep them out of work and forever impact their quality of life. But a good benefits advisor will explore other options, like physical therapy, that might eliminate the need for surgery altogether, solving your employee's ailment without all the downfalls that accompany the more drastic alternative.

More choices, more savings

Supply chain management is often an unexplored option in the health care industry, but working with an advisor who knows how to do it can make your company's benefits plan unbeatable. The savings, options, and care quality that can come from managing the benefits supply chain can give so much more to your business than a status-quo benefits plan, and your happier, healthier employees will also feel the difference.

Jim Blachek flipped his traditional brokerage model in 2017 to focus solely on consulting and building value based health plans. In 2019 he co-founded a consulting only firm Dynamic Benefit Solutions and founded Local Script a transparent pharmacy and marketing organization focused on reducing employer and employee costs while supporting the local community.

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Why managing the health care supply chain adds value to your benefits plan

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