Three Ways to Reduce Group Health Plan Costs
Employers searching for ways to reduce health care costs will usually look first to plan design changes. Have the employees pay a bigger share, the thinking goes, and the company will save money.
Right? Well, not exactly.
Asking employees to pay more accomplishes one thing: it keeps them from getting the care they should, resulting in the need for more costly care later. Forward thinking companies are rejecting the knee-jerk reaction of cost-shifting and embracing new approaches, like Value Based Plan Design.
Value Based Plan Design emphasizes outcomes, and not just dollars spent. It dictates that the overall health of the group is an investment, and not just a cost to be managed. It proves that there is greater value in maintaining health than in managing the initial costs of care.
Clearly, investing now beats paying more later. The idea is to keep employees from developing costly conditions by giving them the best access to preventative care. Some key features to Value Based Plan Design - Remove the barriers to preventative care. Design a plan with low cost (or no cost!) health screenings and first dollar coverage for routine medical care. Remove high front-end deductibles. Encourage compliance with treatment plans by providing affordable drug coverage.
- Individuals must be engaged. Employers must create an environment where individuals are accountable. Employees must take responsibility for their own health.
- Incentives work. It’s the carrot, and not the stick, that will get results. Think extra flex dollars as a reward for compliance with treatment, as opposed to punishing the non-compliant smoker.
Even in instances where health conditions already exist, there are huge savings to be realized by using the principles of Value Based Plan Design. Consider the big cost-drivers: diabetes, asthma, and hypertension. Treating these conditions is tough to do, as the patient doesn’t “feel sick” most of the time. And so, they often don’t comply with treatment plans, especially if there’s a high deductible and a tiered pharmacy benefit. With no compliance, the condition worsens, which means more costly treatment. But if they are offered better access to affordable drugs, and if compliance is checked regularly, then patients are far more likely to experience better health outcomes. And that saves money.
Data is an important component here. Working with a benefits company that can help track compliance and outcomes, providing the necessary reports and analytics, is a must. Clinical support is key, as well. Most wellness companies focus only on large cases, but Value Based Plan Design calls for a larger framework to see that the right utilization happens across the continuum of care. Measurement and adjustment must be ongoing.
The progressive benefits manager will see that the investment in “human capital” will pay off in ways that aren’t always immediately apparent. Think of the indirect costs of absenteeism, presenteeism, and disability. Think about how much they can be reduced, and how much health-related productivity can be improved, with a new approach to overall group health.
Prairie States Enterprises Inc Prairie States Enterprises Inc provides comprehensive health benefit plan third party administration services for self-insured organizations with a unique clinical focus also offering in-house health management & wellness, benefits optimization, plan analysis & predictive modeling tools.
Prairie States Enterprises, Inc. is a third-party health benefits plan administrator that brings industry expertise and a clinical focus to self-insured companies. Our in-house claims administration, health management services, wellness programs, plan analysis and predictive modeling tools result in remarkable and unprecedented cost control for employers. We also provide the most compassionate and personalized level of service for plan members.