By understanding the needs of plan members, employers can leverage the flexibility of a self-funded health plan to customize the plan.
As of mid-May, more than 32 million people have been affected by the COVID-19 virus, burdening the already strained U.S. health care system. While the health care system has been in dire need of reform for nearly a decade, the past year shined a harsh light on where health care struggles to support people and providers.
Rising medical costs stemming from the pandemic present a critical challenge for employers and their health plan members. Patients' individual needs — especially those with long-haul COVID-19 symptoms — can amount to a significant expense. And without easily accessible information on how to find affordable care, many people let potential health problems persist because they're unsure about where to find the right care.
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According to a Maestro Health survey, 70% of Americans feel that today's health care system is difficult to navigate. As a result, HR often shoulders the responsibility to help employee health plan members understand the health care system, despite the fact that they typically possess few resources of their own. And HR employees typically struggle with the same health care system issues as their fellow employees.
Switching to self-funded
Although there were calls for better health care benefits plans and coverage well before the pandemic, COVID-19 is a catalyst to enact real change to our health care system. Employers can champion that change by considering a self-funded plan for their business.
In operating a self-funded plan, it's critical for organizations to partner with the right third-party administrator (TPA) that can help administer a better plan experience and design. Employers should consider a partner that gives access to claims data free of charge so they can build a plan that meets the needs of the member population.
As the country climbs its way out of the COVID-19 pandemic and reflects on how health care can improve for the future, self-funded plans could be the answer for organizations looking to better navigate the health care system's difficulties. Here's why:
1. Gain control over health care costs.
Self-funding essentially puts employers in the driver's seat of their health care plan — they don't have to pay into profit margins, fixed fees or "anticipated" claim costs typically charged by traditional insurance carriers. Employers also have full access to their claims data, giving them actual insight into cost drivers and the ability to forecast what an actual claim spend looks like — including more costly years — based on health member population trends.
Data access and customer reporting gives companies a whole new level of transparency into their health care plan. With insight into cost drivers like avoidable ER admissions, high-cost claimants and chronic conditions affecting the group, employers can craft cost management strategies around the conditions impacting members and play an active role in engaging people with their health plan.
2. Tailor member plans to the employees' needs.
Traditional insurance models typically shield health claims data from the companies they serve. And while TPAs usually provide this data, some charge a price to access it or aren't able to provide insightful customized reporting.
Without knowing what's impacting the member population, employers can't tailor health plans to members' needs, affecting their bottom line as a result. Additionally, with 5% of members driving 51% of employer health plan costs, not being aware of high-cost members can hinder employers from helping these members access appropriate and affordable care.
By understanding the needs of plan members, employers can leverage the flexibility of a self-funded health plan to customize the plan around the needs of their group (rather than slashing benefits or increasing premiums year over year).
3. Deploy effective member engagement and education strategies.
Only 12% of Americans have proficient health care literacy. However, this isn't a surprise considering that 65% of Americans also don't understand their medical bills.
Given this issue, the right TPA partner can also help with common communication pain points in today's health care plans, like cumbersome online portals, unreadable explanations of benefits (EOBs) and access to plan information. Employers should consider a TPA with user friendly technology and a high-touch service model to help people navigate their health plan and support the company's HR team.
It shouldn't have taken a global pandemic to realize how broken the health care system is. However, employers have an opportunity to make things better for their health insurance plan members. By leveraging a self-funded health plan, companies can offer health insurance that does the job it should have done all along: taking care of people.
Anne Brunson is vice president of self-funded solutions at Maestro Health.
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