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 2019 National Survey of Employer-Sponsored Health Plans projected that that the average total health benefits cost per employee would rise by 3.9% in 2020.1 The expectations for 2021 show even more increase. According to Mercer's 2020 National Survey of Employer-Sponsored Health Plans, health plan cost per employees will rise another 4.1%. However, it's also clear that employers do not plan to make changes or to make significant changes to health plan offerings, and cost-shifting will impact employees less than in recent years. Although there is much uncertainty surrounding the impact of COVID-19 on health costs, 57% have made or plan to make no changes to reduce cost in their medical plans in 2021. In comparison, 47% of employers made no changes in 2019, and 44% the year before.2
Even if the majority of employers don't plan to change their plan offering to shift in the new year, there are still significant costs involved in employer sponsored health plans, and employers are still navigating a complex landscape.
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.
Download the eBook An Introduction to Insight-Driven Benefits Administration to learn more about how you can harness your health plan data to drive your benefit strategy forward.