Learn how healthcare can deliver the strategic advantage your business needs.
Combat rising business costs by rethinking your health plan strategy.
Rising healthcare costs were once viewed as a necessary evil over which you had little control. Another year, another cost increase. But that mindset has shifted as companies have discovered new strategies that put the power back into their hands.
In today’s business environment, companies like yours are facing challenges on all fronts — rising inflation, supply chain issues and a competitive labor market. These are all factors that are out of your control. But many forward-thinking organizations are combating these uncontrollable challenges by taking charge of a business line item they can control — their healthcare coverage.
It’s time to challenge the status quo
Today’s executives are critically evaluating health plan offerings and asking questions. They’re looking for a way to do the right thing by their employees at the right price for their business. To cut the complexity, clutter and chaos as they save. They’re pursuing plans that allow them to take more control. And that help their employees and their families get higher-quality care and improved support.
They don’t want to buy another health plan. They want a completely reimagined healthcare experience that will add value to their business and give HR the tools they need to attract new candidates and retain existing employees.
If that sounds familiar, read on. Consider these tactics that can be incorporated into your health plan to transform it into a complete and strategic solution.
- Gain insight into utilization
- Improve the experience for members
- Protect employees from unfair healthcare charges
- Reinvest health plan savings back into your business
Transparency into cost and quality
Information about how plan participants are utilizing healthcare can give you the ability and opportunity to optimize your healthcare spend. Insight into cost and quality is one of the major strategic reasons for choosing a fully independent self-funded health plan.
Additionally, these plans uncover blind spots into how your employees are unknowingly driving up costs. For example, if your employee population experiences a high rate of ER visits, your plan partner could help educate them on the benefits of visiting an urgent care facility. But if you’re trapped in a traditional PPO plan, it may be impossible to know where your plan funds are being spent and how much you’re paying.
A better health plan will provide access to essential data
While federal regulatory efforts are underway to increase transparency, most hospitals continue to resist transparent reporting of the actual cost of care. So, it’s on you and your business to wisely choose the plan that meets your needs.
Not only that, but by providing your HR team with the improved information and tools they need to make better decisions, the right plan partner helps you empower your staff to actively manage your health plan strategy. Imagine if you could give them 24/7 online access to utilization and claims status reports as well as robust member support and educational resources. When you help HR optimize your plan performance, your employees can become smarter healthcare consumers. Extending transparency to employees can encourage them to embrace self-funding more rapidly and incentivize behaviors that save everyone money.
Why does one hospital system have 223 different prices for the same procedure?
At one California-based hospital system, prices vary widely for the exact same procedure. Commercial and out-of-network plans pay some of the highest prices.
The cost of a C-section fluctuates between $6,241 to $60,584, depending upon these payment types:
- Cash Price
- Commercial
- Gross Charge
- Medi-Cal
- Medicare
- Out-of-Network
- Health System Plan
Cost containment strategies for companies and employees
If escalating costs seem inevitable with your current plan, it’s important to arm yourself with information about alternatives. Approaches have emerged that can increase your ability to boost savings for your organization and lower your employees’ out-of-pocket (OOP) spend.
Let’s start with cost control. Typically, price data is not available within a commercial health plan. How can you actively manage your plan costs when you don’t have access to how much you’re paying for individual services?
A 2022 RAND study1 found that U.S. hospitals are charging wildly different prices for the same services. According to the report, on average, employers are paying 224% of what Medicare pays for the same services at the same facilities. Who pays the price for that significant cost disparity between Medicare and private insurance? Employers and, ultimately, their employees in the form of higher deductibles and OOP costs.
Reference-based pricing (RBP) can be a transformative advantage. RBP is a form of price protection that guards companies and their employees against potentially inflated or unknown costs for treatments. It can help lower costs and empower employees to make active, informed choices about their care. With RBP, a self-insured company pays for healthcare services based on the actual cost or the Medicare reimbursement rate plus a reasonable profit — not on inflated and variable prices. For example, the cost of a CT scan in the U.S. varies widely among hospitals. Medicare pays about $200. With RBP, an employee could pay about $240. The savings are substantial compared to traditional PPO models, in which claims are typically paid on a percentage of charges and a 50% discount in charges can still result in a $5,000 bill.
The right health plan partner can maximize the benefits of RBP. They can assist with member education, price negotiation member support and care navigation. Some partners will even work with health systems and doctors to pair direct contracting with RBP for even greater savings. Using artificial intelligence (AI) with RBP is a new industry development. AI can help reduce member disruption and assist clients in strategic decision-making.
Direct contracting is another way to control costs — and improve quality of care, too. This strategy can make it easier for your members to get affordable access to highly rated health systems, physicians and facilities when they need it. In this model, your business gets the advantage of direct contracts with superior service providers at pre negotiated rates that are cost-competitive. Members in your plan are guided to these partner providers. Your business saves money, your employees get affordable, high-quality care, and providers enjoy increased patient volume. That’s a win-win-win.
A superior member experience for employees.
When plan members use their health plan, it’s because they need care. It can be scary and confusing. And with traditional insurance plans, it’s often a less-than-satisfactory customer service experience.
A well-designed health plan with a deeply supportive customer experience is an advantage for today’s businesses. Supporting members throughout the entire healthcare journey can lead to healthier members (plus more efficient medical care and
reduced costs as covered above).
Navigate your way to healthcare savings. Look for a plan that includes expert care navigation to help members find quality providers that meet their unique needs. Many leading solutions will also include wellness, support for chronic conditions and resources to help educate members on their prescriptions.
High utilization of these plan benefits can help lower costs — but introducing new tools to members is essential to success. Your health plan solution should include access to both live and digital resources to educate members about their plan benefits and demonstrate how to get the most from their plan.
A health plan solution that provides support and guidance across the entire healthcare journey improves a member’s experience — and can lead to lower costs.
A good health plan partner will work alongside you from the outset to design a customized solution that delivers all of these benefits, which ultimately gives everyone peace of mind.
The impact of a strategic, customized health plan solution
Your ability to adapt no matter what your business encounters is constantly being tested. And you can bet your creativity will need to be tapped into repeatedly. By building a more strategic health plan solution, you can bring more advantages, deliver more value and even protect your company’s bottom line.
With a more strategic health plan solution, you can:
- Gain access to information and insights so you have the confidence to make better decisions about your coverage
- Improve your control over costs, offering new opportunities to reduce spend by as much as 30%
- Focus on providing a supportive member experience throughout the entire healthcare journey
- Deliver more affordable, high-quality care and design flexibility
- Greatly enhance your recruitment and retention efforts
CASE IN POINT: Signature HealthCARE
The senior living sector was one of the hardest-hit industries in 2020. Elderly residents were at high risk for serious complications from COVID-19. Facilities were hard-pressed to maintain enough staffing and institute effective safety protocols.
Fortunately, Signature HealthCARE had control of their health plan, which included reference-based pricing, so they were able to make critical adjustments to help their employees on the front lines get through the crisis. When schools closed, they were able to supplement their workers’ childcare and provide transportation for employees to and from work in a safe setting.
With a greatly improved health plan and newly added benefits, Signature HealthCARE was able to retain employees and improve recruitment efforts, even in a tough labor market.
Make this the year you reimagine your health plan experience.
Staying competitive means looking for every opportunity to get ahead. It means balancing business strategy with caring for your people. And that makes selecting the right health plan solution more important than ever to gain a competitive advantage.
Today, there are new options. You can find complete solutions that give you more flexibility and control over your costs than traditional large carriers. You can choose partners that offer new approaches and understand that one-size-fits-all doesn’t fit your vision for caring for your employees and their families.
It’s up to you to take the initiative. Finding the right health plan solution can transform your experience and provide far-reaching advantages to your business.
For more information, contact American Health & Wellness today.
