Employer considerations before adopting a value-based MSK benefit 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 MSK Plan Design
  • Value-Based MSK Network Design
  • Value-Based MSK Care Delivery

Value-Based MSK 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 MSK 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 MSK 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 comprehensive MSK solution can reduce costs, improve health outcomes and provide you better visibility &  control over your musculoskeletal benefits.

Request a free demo

We’ll get back to you promptly.

Is it time to take a fresh look at direct contracting?

Outside of health benefits, your organization is likely to have direct relationships with hundreds of partners with specific agreements, point of contacts, the price for services, and expected quality of delivery. Why can’t it work for health benefits? It can.

Contrary to popular belief, direct contracting with health systems is not a new idea. It had been tried and tested several times before and has proven to be successful for several employers. Large companies such as Boeing, Walmart, Intel and many others have successfully implemented it to lower costs and improve outcomes.

Can this model work for everyone?  Yes, but the success heavily depends upon the motivation of the employer to make it happen.

Let us start with the reasons why someone should not make a switch. First look at your overall healthcare costs. Are you Ok with the amount you’re spending as well as the inflation rate? If yes, why fix it when it is not broken for you.

But if you are like most businesses, you are not happy with the rate of cost increase. Now try to answer the next business question – What is the value or ROI you are getting in return for your healthcare spend?

The ROI can be determined based on the following formula.

Value = Outcomes/dollars

If you are unclear about the value, then you may not currently have the right metrics to justify increasing the budget this year or next.

What kind of outcomes should you be tracking to determine ROI?  Professor Michael Porter suggests that outcomes can be based on the improvement in the medical conditions of your population. For example, if your employee population is facing serious chronic conditions, is your medical spend improving that condition? If not, your money is not bringing the returns it deserve.

Of course you can measure other metrics such as average number of days taken by employees with a specific condition to come back to work.  Beyond the health outcomes, you can also set metrics based on member experience; such as how long it takes for your members to get appointments, how engaged are your providers in getting your employees go through annual wellness checks? How satisfied are they with the service they receive from your provider network.

If the answers to these questions is “not sure”, you may want to explore direct contracting, which will help you take direct control over the cost of care, define and measure the metrics and align the payments to your provider partners.

Obviously, this is not going to be easy. You must have serious purchasing leverage as well as support from an intensely focused administrative intermediary to make a move toward direct purchasing.

We are happy to help.

Request a free demo

We’ll get back to you promptly.

Effective health plan administration with outsourced providers

Health plan administration can be a significant drain on your HR and administrative staff. If the in-house staff is burdened with administrative tasks, it can’t make progress on strategic initiatives. That’s one of the reason why the outsourced plan administration is on the rise in mid-large sized companies all over the country. The other reasons include more specialized expertise around compliance, access to benefits administration technology and desire to reduce costs and liability risk.

Traditionally such outsourcing was limited to middle and back-office functions such as member intake, open enrollment,  SPD, claims processing etc., recently the role of vendor is evolving into complete benefit administration including direct interactions for all things benefits, with employees and family. This strategy can be risky without proper planning. The more hands-off and distant the in-house benefits staff is, the more difficult it will be for them to effectively intervene and control when some things don’t work.

Here is a list of some of the practices that may help HR obtain more value from their outsourcing relationships in health plan administration:

Focus on Employee experience

No matter how great the time or monetary savings you can achieve with an outsourced provider, the employee experience should be the first thing that you should focus especially when the provider is going to engage with employees in personalized two-way communications.

This requires that the provider should try to integrate into your corporate culture. Their team and systems should be flexible to adapt to your culture and your employee’s expectations.

Document your processes

Many times, new providers are lost because they don’t know your processes. It is important to document your  “As is” and ‘To be” processes. This documentation should spell out what activities should happen at each stage of the benefit process lifecycle, as well as the escalation process, when there are issues. You should share any updates made to this documentation with relevant partners.

Define Objectives Clearly

Each outsourced relationship in benefit administration should have well defined quantitative and qualitative metrics. If cost savings is the goal for a certain partnership, how would you measure it? Do you have the baseline numbers to start?

If you are expecting qualitative benefits such as improved response times and increased employee job satisfaction, how will you be able to demonstrate value?

Get Consensus from key management

All key members of management should be aligned with the goals and objectives. Internal issues should be resolved prior to engaging a provider. Otherwise there is a significant risk if provider getting caught in the middle, which may lead to delays as well as the risk to the overall project.

Create accountability

Without a clear sense of accountability, the space between HR and the outsourced provider could grow to a level where no one seems accountable.

Most employees still need a personal touch, guidance from someone with their best interests in mind, someone within their own organization.  The HR should make an internal person “accountable” for each outsourced front-office function, to step in, when an issue is escalated until it is resolved.

Create Service Level Agreement

Well-written service level agreements (SLAs) will enable you to measure the value from outsourcing. The SLA’s should include language on the escalation process. The SLA should also include metrics and the need for the provider to provide supporting data for the metrics.

Strive for a mutually beneficial relationship

No business can last without making profit. Getting a high discount may get you a “low cost” provider, but it may also lead to poor service. Give the provider enough room to invest in long term goals including skill development and IP creation. Their return on such investments will eventually help your organization as well.

Communicate Openly

Openly share information with the providers. Set up systems to track issues and the path to resolution. Regular sharing of information between both parties can prevent the occasional and short term issues from becoming larger problems.

Use Technology

The time to rely on papers or email for plan administration related activities is over. All activities related to benefit plan elections, QLE, eligibiity audits, summary documents, clinical and claims data should be in a  centralized repository. The enrollment information should pass from employees to providers as well as clinical/claim data back from providers to employees.

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.

Request a free demo

We’ll get back to you promptly.