Partnering with employees to save healthcare costs

There’s an enormous amount of waste & inefficiency in health benefits. The primitive benefit designs prevalent in most companies keep employees away from discovering the actual cost of care. The existing system is constantly shifting costs to employees, often without informing people of those costs in advance. This creates no incentive whatsoever for employees to explore conservative treatment options or shop for higher quality care. Until people are able to connect the cost of care to their out-of-pocket spend, they should not be expected to change.

Steering employees away from overpriced healthcare providers through benefit design incentives and helping them make better care decisions can drive down costs for everyone. However, doing so requires disciplined execution of efforts that obtain employee buy-in and commitment to necessary decisions and behavior changes.

Positive messaging

Communication of any cost-cutting initiative needs to be handled carefully. Start by helping employees understand why savings matter in the first place. Share with them the effect of making better decisions to their financial well-being and enrichment of their benefits.

Make it simple

Employees should be empowered with the right tools and support that helps them make better decisions. Create an easy shopping experience that provides clarity on best treatment solutions for their current needs and suggests high-quality, low-cost providers. Remove barriers such as ‘deductibles’ that cloud people’s judgement in making a better decision.

Timely Education

Including cost-saving suggestions during open enrollment is not enough. It won’t sink in the first time. Repetition is essential. The cost-saving targeted messages should be delivered at health fairs and when people are looking for care, via multiple channels.

Share the savings

Allowing employees to personally share in the savings they generate can go a long way. Tying incentives directly to cost-sensitive behavior encourages people to seek out ways to save.

Measure the ROI

Evaluate your investments against overall cost savings, tweak it regularly to gain the maximum impact.

At Sprite Health, we work hard every day to help self-funded employers design simpler, lower-cost, higher-value health plans. Sprite empowers your people with simple, transparent, upfront pricing for services and treatments that address their specific needs. With hands-on support by our concierge, your people get a seamless, personalized experience that makes accessing, understanding, navigating and paying for care effortless.

Employer considerations before adopting a value-based health plan

The promise of value-based care is to deliver the best outcomes at a lower cost. Providers are incentivized to keep members healthy by proactively managing the health needs of the members, delivering high quality care while reducing the use of unnecessary tests and treatment.

Self-funded employers have a lot to gain from this model in higher quality, better experience and outcomes and reduced costs. However, it requires a shift in their thinking from the way benefits are designed and delivered today.

We think the effective implementation of value-based care for self-funded employers would require at least three considerations-

  • Value-Based Plan Design
  • Value-Based Network Design
  • Value-Based Care Delivery

Value-Based Plan Design

Unlike traditional plan design approaches, value-based plan design should be focused creating member experiences which encourage them to utilize high value services that produce better outcomes.

Benefit-AnalysisIt is important to carefully deliberate the implications of such design to ensure you have the systems and resources necessary to fully implement the design and your design fits within the culture of your organization.

Benefit administrators should also be cautious about how they communicate the value proposition of this model, if not done well, it may look like a restrictive narrow network.

They can integrate financial incentives such as lower premiums, lower copay, cash or gift cards, and focus on communicating the value proposition such as unique experience, plan of care, coordinated care etc. to encourage employees to use the system to achieve the desired results.

Value-Based Network Design

Employers can explore value-based care products through a health plan or a direct contract with a health system in an area where they have a large geographic footprint.. Either way, while designing networks, have an open discussion about how the providers can leverage what they’re already doing to deliver an improved experience for the employees.

network designWhile there are several models which they can use for contracting, one possible model is risk adjusted monthly rate per member for primary care, FFS with reference pricing for urgent care and severity adjusted episodic rate for scheduled inpatient care.

Each model should include adjustment for quality. Instead of using all CMS quality measures, the plan administrators can choose to focus on the measures that are important for their organization. For instance, if surgeries make up a big part of your costs,  you may want to pay higher to providers who have lower surgical complication rates because their outcomes are better.

Providers engaged in value-based care are likely to have a lot of data about your employees, you should seek assurance from them about their data security policies, procedures as well as reports on third party audits.

Value-Based Care Design

Value-based care design requires that providers provide both longitudinal, relationship based care management, and short-term, goal-oriented care management. By applying risk stratification, providers should identify members, their concerns and the level of care needed for each cohort.

In value-based care, the providers should be utilizing multiple channels (text, emails, portal, home visits, group visits etc.) and include chronic care management, behavioral health, self-management and medical management.

ACO care delivery model for employersCare coordination services are important components of value-based care delivery.  Providers may want to reduce the cost of care by steering members to their internal network, but it should not be done at the expense of member’s experience. The care coordination design should improve the transitions of care where the physicians are working more closely with hospitals and emergency departments, as well as with high volume specialty service providers.

Employers should ask for better data sharing on clinical, operational, financial data as well as reporting on quality measures such as HEDIS.  Other metrics impacting employee experience such as same-day appointments, doctor follow-ups, plan adherence, care plan per member, health performance against goals etc. should be checked against claim data to get a real-time insight into care delivery.

Value-based care holds a great promise for employers. It is designed around the specific needs of your employees who benefit from a team that coordinates their care, and technology that connects them and their providers with information to help get the right care — it is also going to reduce the costs for you.

Talk to us about how our health insurance solution can reduce costs, improve health outcomes and provide you better visibility &  control over your health benefits.

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Why wellness should be a part of value-based plan design

According to RAND corporation, about 80% of large employers in U.S. offer wellness programs. Despite a significant spend (over $8 billion annually) by employers on these programs for over 20 years, participation by employees as well as the program’s ROI remains poor.  We can think of three possible reasons:

  1. Lack of targeting
  2. Lack of evidence
  3. Lack of accountability

Lack of targeting

Wellness programs typically are not geared towards demographics of specific employee population. Plans based on VBID (value-based insurance design) are targeted for specific populations affected by specific conditions.

For example, free gym-membership is great for employees who are motivated to stay healthy and can take out time to exercise, not so much for someone who is struggling with chronic conditions, commuting for hours to get to work and feels the pressure of higher out of pocket costs. For such individuals, a plan that offers a lower out of pocket costs for certain evidence based services (and medications) goes a long way in reducing barriers to better health.

Lack of evidence

Karen Pollitz at Kaiser  summarizes it well –  “For a lot of things companies do, it’s all about being evidence-based. But with workplace wellness programs, it’s faith-based: A telling finding from our survey is that most employers who offer wellness programs don’t collect data on whether they work.”

On the other hand, VBID design is based on reducing barriers for high value services offered by providers who follow evidence based guidelines.

Lack of accountability

There are so many factors that go into helping an employee or dependent get “healthier”. Most wellness programs act like silos and provide a very nichy service, which makes it hard to determine if any improvements are a result of a specific program or something else.

VBID plans on the other hand are outcomes based that use clear metrics, incentives and payments design for enhancing access to preventive services as well as improving health outcomes by reducing barriers to effective treatments.

We believe that the impact of workplace wellness programs can be significantly improved if these are incorporated into an overall value-based plan design.