U.S. employers are continuing to struggle with rising health care costs. To limit spending, many are shifting costs to employees while others are emphasizing wellness initiatives or controlling costs through health savings accounts and reimbursement arrangements.
“The biggest area of concern we are hearing from employers today is they can’t manage or predict the cost of health care benefits,” says Randy Narowitz, CEO of Total Health Care. “Having predictable, manageable cost increases is a real value to employers.”
Smart Business spoke with Narowitz about what to ask when choosing a plan.
What factors should companies consider when analyzing their employee benefits?
Typically, you start with the plan design that you offer today then decide if the company can maintain, improve or cut back on the benefits.
It’s important to evaluate alternatives in terms of cost and products offered. There are a variety of ways to differentiate carriers: size and strength of the provider network, plan design flexibility and premiums.
What questions should an employer ask a carrier when choosing a plan?
If you are using the benefits as a tool to attract or retain employees, then you want to evaluate the quality of the benefits and compare them to what else is out there in the marketplace. Features such as co-pays and deductibles are factors in the decision-making process and can be tweaked to be competitive. Also, access to care and a strong provider network are important components to consider.
If you are cost sensitive, then you want to ask about how to optimize the benefits at the lowest possible premiums and analyze the trade-off between the premium costs and the benefits.
What can a company expect from its relationship with its carrier?
Most employers use the services of a consultant or broker to assist them in the decision-making process, and their roles vary.
At one extreme, the consultant is your exclusive liaison to the carrier and can represent several health care plan options, helping the employer understand which products are best for its business. The consultant may also take the lead on administrative tasks including open enrollment, employee education, compliance and communications with the carrier.
At the other extreme, a consultant’s role is limited to the selection process. You can expect your representative to be able to differentiate the plans and the products depending on how you prioritize your decision-making criteria.
As an employer, you should expect your representative to be able to navigate through the decision-making process on your behalf.
Your plan representative, carrier and consultant also need to be able to educate you about the latest changes associated with health care reform.
How can companies save money when they are looking for a carrier?
Shifting the financial burden to employees by raising co-pays and deductibles, and having them pay a portion of the premium are ways to reduce and control your health care costs.
Savings associated with prescription drug costs can be achieved by raising co-pays or by restricting access to branded drugs when generics are available. Employees are very sensitive about changing medications, but there is a real opportunity to save money when you make these adjustments. Contracting with a restricted network, such as an HMO, and introducing wellness initiatives can also reduce costs.
What do employees need to know?
If you change a plan design in any way, it is important that the changes be communicated clearly.
Employees are very resistant to a change in their health care benefits. If you are planning to reduce benefits or shift costs to the employees, make a significant commitment up front to educate your employees.
Simplify the message and commit the time and resources to help them understand the changes before the new contract year begins.
Randy Narowitz is the CEO of Total Health Care. Reach him at (313) 871-2000.
Insights Health Care is brought to you by Total Health Care
Integrating a comprehensive behavioral health plan into the medical health plan your company sponsors is a win-win. Employees are able to improve their health mentally and physically, and the employer can track cost savings related to direct health care costs and indirect costs through more productive, healthy employees.
“One out of every four adults will experience a mental health disorder in a given year,” says Tom Albert, manager, Behavioral Health Services at HealthLink. “I think few people, in general, realize the rates are that high.”
Smart Business spoke with Albert about how integrating behavioral and medical health allows employers to better coordinate their members’ care.
How do behavioral and medical health impact employers?
The rate of one in four adults experiencing a mental health disorder annually goes even higher for those with chronic medical problems. Furthermore, employees with untreated psychiatric or substance use disorders can be at a higher risk of on-the-job injuries. This can lead to missed time from work, expensive treatment and a decrease in quality of life for the individual.
Absenteeism is not the only concern for employers. Presenteeism, or the loss in productivity of employees who come to work sick, can also be costly for employers. The Institute for Health and Productivity Studies at Cornell University found that depression and other mental health problems are among the illnesses that have the most significant decrease to productivity.
What’s the advantage of integrating behavioral and medical health management?
Ninety-three percent of Americans believe a health care plan should cover behavioral health treatment, according to a National Association of Psychiatric Health Systems survey. Some workplaces don’t cover behavioral health. Other employer groups cover it but carve out the management, which makes it difficult to coordinate care.
Having one organization manage both medical and behavioral health benefits is gaining popularity among employers. With integration, the health plan’s medical and behavioral clinicians collaborate and ensure that individuals and their families have access to care that best meets their needs.
What are the overall goals of utilization and case management for behavioral health?
Utilization management ensures that health plan members have access to the care they need; that care is delivered in the right setting; that the quality of care meets high standards; and that resources are used efficiently in order to help control costs.
Case management involves case managers communicating directly with members and their families to assist them in navigating the health care system; addressing any obstacles to accessing treatment; and empowering members and their families to maintain an optimal level of health and functioning.
Case management helps the member to stay well so he or she doesn’t have to keep using the same services and missing work.
What is the Mental Health Parity Act?
The Mental Health Parity and Addiction Equity Act of 2008 doesn’t mandate that employers of 50 or more employees offer behavioral health coverage, but it does require that if the health plan covers behavioral health services, the financial requirements and treatment limitations are no more restrictive than medical and surgical benefits.
Prior to parity, employer groups often relied on treatment limits to control costs by limiting the number of days in a hospital or the number of visits for outpatient mental health treatment. Parity is good because the limits often were arbitrary, but it does mean the best way to control costs is to ensure care is only approved when medically necessary.
What are the results of formalized behavioral health management and review?
A Milliman case study of a large private manufacturer found a 10 percent reduction in members with chronic medical and psychological conditions saved $1 million annually and another $750,000 from reduced absenteeism, fewer and shorter disabilities, and increased productivity. An effective behavioral health management organization ensures members receive the right treatment in the least restrictive setting, which reduces costs and time missed from work, while improving overall health.
Tom Albert is manager, Behavioral Health Services, at HealthLink. Reach him at (314) 923-6288 or Thomas.Albert@wellpoint.com.
Insights Health Care is brought to you by HealthLink
To attract and retain top talent, it is critical for a company to have a strong benefits plan in place. In today’s uncertain environment, employee benefits represent a significant portion of the financial security employees are seeking, and they are demanding jobs in which those benefits meet their needs.
To ensure that employees are satisfied with your company’s current health care plan, it is important to solicit their feedback. Then, based on your findings, it may be time to consider searching for a plan that is a better fit for your employees.
“Companies should look at a number of benefit plans to determine if the designs and structures could better meet the needs of their work force,” says Stephen Slaga, chief marketing officer of Total Health Care.
Smart Business spoke with Slaga about how to identify the right provider for a business’s employee population and how to ensure a smooth transition when changing plans.
How can employers assess whether changing providers would benefit their company?
Typically, employers look at overall satisfaction with their current provider to determine if a change is needed. Cost, quality of coverage, accessibility, flexibility and the impact a change may bring both to the employer and the employees are some of the components that are measured to make this determination.
Seeking employee input is also important. For many employers, the No. 1 objective in offering benefits is to retain employees. However, those benefits must not only meet the needs of employees, they must also meet the monetary constraints of the employer.
Determining which carrier can provide the best care at the most efficient price and matching coverage options to what employees are looking for is critical. When possible, use benchmarking data to compare the offerings of different providers. Employers should also review coverage options and contribution strategies that their direct competitors are deploying.
Because the cost of benefits can have a large impact on employees’ paychecks, strong health care coverage and benefits are an important piece of the overall job package. In many cases, a small percentage difference in salary is secondary to the type of health care coverage available to employees.
What questions should an employer ask when seeking potential providers?
It is important to be thorough and to ask the right questions when searching for a potential provider. How many years has the provider been operating? Is it financially stable? What kind of reputation does it have? Inquire about the provider’s different types of benefit plan offerings and the service area. Also investigate historical rate trends in order to gain a better understanding of what to expect in terms of future premium increases.
Finally, be cognizant of customer service criteria. It could be worth the extra premium for the business owner to have the peace of mind of knowing that he or she is dealing with a reputable company that is looking out for the employees.
What common mistakes do employers make when changing providers?
Employers don’t always ask the right questions and, as a result, they may not fully understand the product they are purchasing. In the rush to implement a change in providers, employers sometimes do things that could result in the disruption of services to their employees.
Another common mistake is that employers assume that lower rates will equal a lower cost, which may not necessarily be true when they factor in the possibility of higher deductibles and coinsurance being passed on to their employees.
What steps can employers take to help ensure a smooth transition?
Make sure that adequate time is given to implement all changes when moving to a new provider. Communicate the changes to all employees and allow enough time so that any questions or concerns they have may be addressed. Conduct employee meetings to explain the changes and how they may impact employees. Also explain the overall value that employees are receiving by creating total benefit statements, which includes salary, benefits, workers’ compensation costs, vacation time, etc.
How can a benefits provider assist with the transition?
Transitioning to a new benefit provider requires significant planning. Employees should be told as early as possible about the changes and be provided with written benefit information explaining those changes. The benefits provider should conduct open enrollment meetings to answer any questions that employees may have. Benefit material should also be made available so that employees can review it on their own time.
How should the change be communicated to employees?
Communicating changes to employees requires adequate time and planning. The most common form of communication is done during the open enrollment season. Often, open enrollments are conducted and led by an agent or broker hired by employers to assist in administrating their employee health care benefits.
Benefit meetings should be scheduled around work so that employees are able to attend to ask questions about the new plan. Providing this education to employees is critical, and there are a number of ways to make information available, including health care plan websites, newsletters and direct mail pieces. Through the use of multipronged education programs, employees will have a better understanding of the changes, which results in better customer satisfaction.
Stephen Slaga is chief marketing officer of Total Health Care. Reach him at (313) 871-7810 or SSlaga@thc-online.com.
Insights Health Care is brought to you by Total Health Care