Recalibrating Directions on the Route to Employer Health Plan Success

Recalculating Directions on the Route to Employer Health Plan Success

A missed exit. The wrong road. The necessary U-turn.

Getting there is seemingly never as easy as the original directions make it out to be. Changes along the way, construction and traffic require us to be flexible and be prepared to constantly recalculate our route.

Employer health plan management requires this same flexibility. There's no one proven route to take to guarantee success. Plans change each year – and often several times throughout the year as new information comes available. In general, the employee benefits industry and the talented professionals in this business have done a stellar job in recent years keeping health care costs in check.

Where are health care costs headed?

Mercer’s National Survey of Employer-Sponsored Health Plans pointed to cost increases of only 2.4 percent for employers in 2016 and an estimated 4.1 percent increase in 2017, both among the lowest ever.1 And PwC’s projection of overall medical cost increases is pegged at 6.5 percent for 2018, up only slightly from 6.0 percent in 2017.2

Yet, while employers have managed to keep health care cost growth relatively under control for multiple years, employees have seen their costs increase significantly. Benefitfocus' State of Employee Benefits study, which analyzed plan enrollment activity across our large employer customer base, revealed an increase of 12 percent for employee premiums for family-coverage high-deductible health plan (HDHP) options from 2016 to 2017. Meanwhile, employees enrolled in PPO plans saw their deductibles and out-of-pocket maximums go up by approximately 10 percent. 

How can employers cut costs without compromising coverage?

To keep costs in check while avoiding shifting too great an expense to employees, employers have tried virtually every itinerary possible: plan design changes, cost shifting, vendor optimization, wellness programs, onsite clinics, telehealth, voluntary benefits and more. And while this multi-route approach may appear to be “all over the map,” attacking health plan management from all sides is simply the required path employers must take. Just as no one size fits all, no one route will get you there.

As far as which combination of routes you should take to manage your health plan, the answer lies in your plan data. You need to have ready access to medical claims, Rx claims and member eligibility as a basis for making decisions. Additional data such as dental, vision and disability claims, as well as biometrics and onsite clinic information, can provide vital color to your decision-making process.

Here are some specific examples of how your data can help you answer important questions about your health plan when mapping out your strategy for your next open enrollment and through the following plan year:

Q: Do we need to change plan design?

A: Analyze year-over-year and multi-year utilization trends of each plan (i.e. PPO, HDHP, HMO).

Q: Do we have the appropriate Emergency Room (ER) utilization?

A: Analyze current year and previous year utilization totals for the ER; evaluate procedure code and diagnosis related to ER visits to determine if utilization is appropriate (or should instead be urgent care or doctor office).

Q: Is our wellness program providing us a good ROI?

A: Create a member population of wellness program participants and analyze pre-wellness program utilization, current and post (two years of program enrollment) to determine if utilization of these employees is less than those not participating in the wellness program. 

The answers to each of the questions above, as well as all others related to your health plan, can be answered using a proven benefits data analytics solution that enables you to 1) monitor and analyze your plan utilization and 2) evaluate the impact of plan design changes in one consolidated application and data warehouse.

The ability to get this information on-demand (without having to wait on a quarterly report from a third party), and easily consume and digest the information with user-friendly reporting tools (no actuarial expertise necessary) can be the difference between reaching your destination ahead of schedule and hitting a costly detour.

The true secret to managing an employer health plan and controlling costs is to recalculate your direction and strategy as new data and information come available. Change is indeed the only constant on the road to employer health plan success.

For more on how you can harness your health plan data to drive your benefit strategy forward, watch our on-demand webcast, Turning Data Into Dollar-Saving DecisionsClick here to download now!

1. https://www.mercer.com/newsroom/national-survey-of-employer-sponsored-health-plans-2016.html

2. https://www.pwc.com/us/en/health-industries/health-research-institute/behind-the-numbers.html