“You get what you pay for” might hold true when it comes to sneakers or computers, but not for health care. Relative to other high-income countries, the United States spends nearly twice as much on health care yet has the lowest life expectancy, the highest rate of avoidable deaths, and the largest chronic disease burden. In fact, studies find that better health care outcomes often go hand in hand with lower costs. Less costly services, like routine checkups, can prevent riskier–and more expensive–interventions down the line.
For employers concerned with both rising health insurance costs and keeping their workforce well, then, it makes sense to encourage smarter health behaviors–and data plays a key role. The insights gleaned from claims data, wellness programs, and employee health surveys can help employers provide the right resources, educational materials, and incentives to ensure their employees access care options that not only save money but also prevent their conditions from escalating.
Alternative Reimbursement: You Can’t Pay Less For Healthcare Unless You Pay Less For Healthcare
Thursday, June 10, 2021, 2:00 PM ET / 11:00 AM ET
The only way to pay LESS for healthcare is to pay LESS for healthcare. This simple statement sounds obvious but is ignored by most employers as reflected in their health benefits. For years, we have depended on the carriers to negotiate the price we pay for healthcare, having a more direct and transparent reimbursement (provider compensation model) is the key to immediately lowering your health benefits cost.
In a post-COVID world, even zero change in employees’ healthcare costs will likely still result in them spending a greater percentage of their income on healthcare. Why? Most household incomes are down so the focus shouldn’t be on maintaining the status quo, but on fighting to reduce overall costs and expenditures.
However, employers face two common challenges when it comes to health care data. The first lies in simply getting the numbers. For the more than half of employers who are fully insured, much of their health care data is in the hands of their insurance carrier. Some carriers simply won’t release data to employers, especially small ones. If they do release claims data, it’s typically only on an annual basis, when premiums are set for the year. What’s more, the data is often sent as an unsorted mess of numbers that employers must then make sense of.
How to get around this lack of access? Many employers are asking for health information directly from their employees, in the form of regular health surveys or biometric screenings offered through wellness programs. According to the Kaiser Family Foundation, 88 percent of large employers offered workplace wellness or screening programs in 2019, up from just 70 percent in 2008.
Employers are also opting to become self-insured, bypassing carriers altogether. According to Kaiser, 67 percent of U.S. workers are now in a self-funded plan offered by their employer, up from 61 percent just the year before. Self-insured employers are able to receive reports through their plan administrator on a regular basis, giving them more insight into claims data on a near real-time basis.
However, once the data is in hand, employers face their second biggest challenge: figuring out how to use it effectively. Pages and pages of claims and wellness data, often from multiple sources, can be overwhelming for employers, especially smaller ones. Advisors can help employers get the most out out of their health care data by following these three tips:
- Choose a focus. There are hundreds of disease classification codes and analyzing all of them, especially in a large workforce, would take a considerable amount of time and resources. Employers can maximize their efforts by focusing on data associated with the most common chronic conditions, such as hypertension and diabetes, or the most common conditions reported in employee surveys.
- Prioritize efforts. Once they’ve dug into the data, employers might be tempted to tackle everything at once. However, rolling out too many initiatives simultaneously can confuse plan participants and reduce effectiveness. It’s usually better to pick one or two priorities a year, such as reducing out-of-network use or non-urgent ER visits.
- Take the long view. As employers start making data-driven changes to their health care programs, they likely won’t see numbers change right away. In fact, expenses may increase in the short term if, say, a wellness initiative pushes plan participants to utilize more preventative care. It’s important for employers to think long term and give changes at least a year to have an impact.