How to forge successful partnerships directly with health care providers

Insurance companies and providers have always co-existed in a unique relationship when it comes to patient care. The providers seek to administer the best care to patients and the insurance company seeks to “manage care” while at the same time managing cost. The paradigm can be conflicting.

However, by partnering with providers and facilities, employers may get more competitive rates and more cost-effective health outcomes. In turn, health care expenditures, the patient experience and medical outcomes are also improved.

“This sort of collaboration empowers providers, making them more accountable for the care they provide, and engages members, making them more accountable for their personal health and wellness,” says Brian Fallon, regional vice president of Network Management & Business Development at HealthLink Inc.

A more complete and proactive approach to member health and benefit utilization shifts the focus from just treating the diagnosis to delivering the right amount of care in the right setting. It also aligns the provider and member incentives with the goals and objectives of the health plan, which can decrease overall health care spending.

Smart Business spoke with Fallon about increasing collaboration between health plan stakeholders.

How is the dynamic between providers, insurance carriers and employers changing?

The Affordable Care Act (ACA) has had a dramatic impact on health care.  From the medical loss ratio mandates, elimination of lifetime maximums, mandated plan design and, of course, additional tax liabilities, employers are looking very closely at their health plan configuration.

The ACA has also attempted to emphasize the quality of care so doctors and hospitals are becoming more attuned to the health care consumer. Provider reimbursement will soon be influenced by pay-for-performance measures, as well as patient satisfaction scoring. Carriers have already started instituting pay-for-performance models and the increased availability of transparency tools has employers and members engaged in the assessment of health care costs. This environment makes it advantageous for an employer to collaborate with a health system and design a custom health plan that drives members to the highest quality, affordable care.

How can employers help make these partnerships successful?

Employers can start the conversation with their broker, to begin to address all aspects of the plan — namely, a plan that focuses on cost, quality and access. All the parties have to work together. You need a broker who is willing to facilitate this sort of dialogue, a network partner who can support custom plan designs and a third-party administrator to administer it all. Once you have the right pieces, face-to-face communication becomes important. Each party needs a clear understanding of what they gain from the partnership and what they’re willing to give in return.

How much time needs to go into these kinds of collaborations?

Time is absolutely a concern for employers of all sizes and a lot goes into these sorts of collaborative negations. This is not an ‘off-the-shelf’ product that can be bought and applied. It’s an individualized process that could take 30 to 60 days.

Much is dependent on the willingness of the employer and provider. It’s important to make sure everyone — internally and externally — has the same collaborative goal before this sort of custom plan design can be developed and implemented.

What’s the best way to get started?

Reach out to a broker, and tell them you’re interested in exploring opportunities to reduce your health care spend. If those opportunities include collaborating with a provider or facility, make sure you have willing parties who have the data and flexibility to sit down with providers on your behalf.

The best way to approach provider engagement is for employers to show how both parties can gain from the collaborative effort and that they have the required resources to make the partnership successful.

Insights Health Care is brought to you by HealthLink

The importance of cost transparency in medical care

In health care, the consumer mentality continues to grow. Over half the respondents to Deloitte’s 2015 Survey of U.S. Health Care Consumers said they go online to research information about their medical needs. At the same time, only 30 percent of consumers are comparing prices before an appointment or procedure, according to a recent survey from HealthMine.

“Consumers definitely want cost transparency in medical care, but there’s still a disconnect that keeps some people from putting it into practice,” says Veronica Hawkins, Medical Mutual vice president of Government Accounts. “While more insurance carriers have introduced cost estimating tools, employees need to understand what the tools can do and how to use them effectively.”

Smart Business spoke with Hawkins about why cost transparency is so important, how cost comparison tools generally work and how much difference a little research with the right tools can make.

Why is cost transparency important?

With many employers moving to high-deductible health plans, employees are being asked to cover more of their medical expenses. To do that, they need to be able to evaluate their options and make the most informed decisions they can.

That means knowing how much a visit or a procedure is going to cost before they go — not after they get a bill. Most people don’t understand that costs can vary widely for medical services. They are surprised to learn costs can even be different for the same procedure, performed by the same provider at different locations.

How do cost comparison tools work?

Depending on the organization’s insurance carrier and the employee’s specific health plan, each tool will probably work a little differently. Price estimates are often available for everything from office visits to X-rays and surgical procedures. The estimates may factor in facility fees, as well as associated costs like consultations, outpatient visits, medications and rehab. That means the estimates should be pretty close to what the patient will have to pay — at least when there aren’t any complications.

What are some easy ways to save?

They are many services that can include facility charges. These extra charges come into play when you see a doctor at a facility he or she doesn’t own, like a hospital-owned clinic. In many cases, patients can pay much less by seeing the same doctor, and having the same treatment, at a different facility. To reduce the cost of those visits, it’s important for employees to know if facility charges will apply, and whether they can be avoided. These tools can help with that.

Should employees be looking at lab costs, too?

They absolutely should. Many people have their lab work done at the hospital or clinic where they see their doctor. But they have a choice. If their health plan has a cost comparison tool, employees can see how much a standalone option, like an independent lab, will charge for tests they might need. Price differences can be significant.

For example, hospital-based labs sometimes charge up to 70 times more than an independent lab for a simple blood test. If a doctor has an agreement with the lab, the patient may not even have to go to a different facility. A lab technician can pick up the sample from the doctor’s office. They’ll do the test, submit the claim and share the results with the doctor.

What other information is important?

Cost is obviously important, but it’s definitely not the only factor. More people are looking through reviews and ratings to help them make informed medical decisions.

That’s why Medical Mutual’s cost comparison tool, for example, includes patient satisfaction scores and quality ratings for doctors and hospitals in its network. It also includes specific information about the doctors themselves, like how long they have been practicing, where they went to medical school and what languages they speak.

Insights Health Care is brought to you by Medical Mutual

Five things CEOs should know about the latest health care technology

As in so many areas of business, technology is radically transforming health care and health plans.

“But there’s good technology and there’s bad technology. Seamless technology and non-integrated technology. Essential, intuitive technology and bells-and-whistles technology. You get the idea,” says Kismet Toksu, president of eBenefits Solutions, an affiliate of UPMC Benefit Management Services and UPMC WorkPartners. “The key is to find the right technology.”

Smart Business spoke with Toksu about five of the latest developments to keep an eye on,when you make your health care plan decisions.

Integration = efficiency.

The right health plan technology includes such things as Affordable Care Act (ACA) compliance and private exchange capabilities. Keeping up with ACA-driven rules and regulations is a massive chore all by itself for any size company, and these changes affect countless aspects of your plan administration.

Thus it is best for both to be administered on the same platform. Capabilities often associated with private exchanges, such as defined contribution and employee support tools, will bolster your benefit strategies today and in the future.

Communication is key.

Health plan platform technology must now have smart communication capabilities baked into it. As the ACA and other external forces continue to change the world of employee benefits, it becomes ever more vital that businesses keep their employees up to speed on their plan options via their employees’ preferred communications channels.

Case in point: A recent workplace survey found that when employees received benefits communications through their preferred channels (i.e., email, web, mobile, etc.), 70 percent were very confident in their selections. When employees didn’t receive benefits communications through their preferred channels, less than 40 percent were very confident in their selections.

Optimizing the user experience.

Gone are the days when employees accessed their health plan exclusively by mail, interoffice memo or an HR benefits fair.

Today, employees expect to be able to instantly access their health savings account and this month’s wellness incentive, via the same platform anytime, anywhere and on any device.

Emulating the ‘Amazon Effect.’

When an employee accesses his or her health plan — via phone, tablet, desktop, laptop or watch — he or she then expects a retail-like experience akin to ordering a book on Amazon or browsing rug styles at Overstock.com.

Similarly, the technology must now include capabilities such as easy-to-use cost-comparison and decision-support tools. These user-friendly tools help customers make the right health care choices that suit their needs, budget and lifestyle.

Tailored human engagement has reached a new level.

To retain the still-important human factor in an increasingly self-service tech world, leading-edge technology partners are now employing customer service avatars and other voice recognition capabilities.

The best of these provide targeted, real-time, in-depth answers to questions that customers are actually asking. Using voice or text, human avatars guide consumers through the decision-making process. This improves customer trust, engagement and brand loyalty — just as “live” customer service always has.

Having a health care plan that meets your employees’ expectations is a powerful recruiting tool for your workforce needs. But don’t just add features to add features; be thoughtful when it’s time to renew your health care plan.

Insights Health Care is brought to you by UPMC Health Plan

How to use data to customize your health plan and control costs

“In today’s health care market, data can be used as a valuable resource to control costs. By examining customized financial data sets, it’s possible to determine where heath care dollars are being spent and where there is potential waste,” says Brian Fallon, regional vice president of Network Management & Business Development at HealthLink Inc.

Smart Business spoke with Fallon about how employers can use data to build a customized health plan and control costs.

Why is data so valuable?

Health care spending can be analyzed in terms of fixed and variable costs. Fixed costs include administrative costs such as third-party administrator charges, network access fees and the premium for stop loss insurance. Variable costs are just that, variable, and include claim utilization cost incurred by covered members/their dependents, and are impacted by plan design, demographics and the health of the member population served.

Data allows fixed costs to be analyzed in order to find opportunities for saving. But more importantly, data allows you to look at variable cost. You can discover where costs are coming from, and if there are underlying root issues. Then, you have the opportunity to predict variable costs and, using custom plan design strategies and cost containment programs, control health care spending.

Does this only work for self-funded plans?

Historically, yes. For employer groups with less than 100 lives, fully insured employers receive a monthly list bill with premiums owed. Since the carrier assumes the risk and pools it with other employer groups, there is little, if any, reporting. Fully insured groups with greater than 100 employees receive some reporting but the availability varies among carriers. Typically, the greater the enrollment the greater the reporting, because once an employer reaches a certain size, there is less dependency on the risk pool and greater consideration of an employer’s own data.

The customization and flexibility of self-funded arrangements, coupled with the fact that a self-funded plan is the employer’s plan, not the carriers, make them ideal for utilizing data to drive more cost-effective outcomes. The chosen programs and services can be customized for the employer — the plan is theirs, the programs are theirs and the savings is theirs.

Is using data to this extent a recent trend?

Using data to look at costs has always been important and a major benefit of self-funding, but changes, such as Affordable Care Act mandates and the removal of lifetime maximums, have facilitated a more aggressive approach.

How can employers use customized data to examine their health care dollars?

Examining data in this way isn’t a product employers just purchase and apply. It’s a process — and the process starts with availability of data. This depends on whom an employer is working with, how transparent the company is willing to be and the degree of creditability within the data.

Some areas that should be examined are ages within the group, top diagnoses and incidences of high-cost medical conditions. Also, consider non-clinical data — out-of-network and emergency room usage — to see if it is a factor of high spending.

Once there’s concrete understanding of the health plan and member population, your advisers can show you how to proactively manage risks. The best way to affect outcomes is a collaborative relationship between all the required parties needed to design and administer a benefit plan. There are also new opportunities with providers who are willing to collaborate in shared risk agreements.

What else do employers need to know?

How data is presented can be as unique as the network or carrier itself. Discrepancies can distort accuracy, so employers need to understand what the data actually entails. They should know the difference between repriced and actual paid data, how current the data is, whether or not it has duplicates and, when looking at discount data, the facility level discounts. It’s also critical to review the facilities’ case mix indexing and the cost to charge ratios. These components can affect the data, the analysis, and ultimately, the conclusions.

Insights Health Care is brought to you by HealthLink

How organizations can benefit from self-funding employee health plans

How to fund health benefits is a major decision for any organization. There are two options — get fully insured through a health insurance carrier or fund it themselves. Until recently, self-funding was only considered for large organizations due to the potential risk involved, but that’s changing.

In fact, according to Pricewaterhouse Cooper’s 2015 Health and Well-being Touchstone Survey, 66 percent of employers with 500 to 1,000 employees are now self-funding their health benefits. That’s up 7 percent from the previous year and up 11 percent compared with 2013.

“Self-funding can be a very effective way for some businesses to control the cost of health care,” says Amber Hulme, Medical Mutual vice president of Central and Southern Ohio. “But it’s definitely not for everyone. Organizations need to evaluate their options carefully to make the right decision.”

Smart Business spoke with Hulme about the basics of self-funded health plans, how organizations might benefit from the approach, and what factors need to be considered before making a switch.

Why has self-funding grown recently?

A decade ago, self-funding was primarily utilized by employers with at least 500 employees. Now, more insurance carriers, including Medical Mutual, have introduced self-funded products for organizations with as few as 50 employees.

In 2018, many small businesses are scheduled to lose the transitional or ‘grandmothered’ status that has kept them exempt from some aspects of the Affordable Care Act. In preparation, even businesses with as few as 10 employees are evaluating the benefits of self-funding.

How does it generally work?

With self-funding, organizations budget for and pay the claims for all employees covered by the plan and any covered dependents, plus administrative fees. Most employers also pay for stop-loss insurance, which limits risk when one employee has a catastrophic claim, as well as when claims for the entire organization are higher than a set amount.

It’s basically the alternative to being fully insured, where the insurance carrier charges a premium and pays the claims — thereby assuming all the risk.

What are the benefits?

Organizations usually decide to be self-funded because it lets them predict costs based on their specific claims history and make any necessary adjustments. If claims are lower than expected, they can invest that money in the business or offer incentives for employee wellness. If claims are higher, their stop-loss insurance can cover it.

There also can be tax advantages to self-funding. Under health care reform, there are certain taxes related to risk that only apply to fully insured health plans. By moving to self-funding, organizations hope to eliminate some of those taxes from their budget.

When isn’t self-funding a good option?

Self-funding introduces more risk, so it’s usually geared toward organizations with more predictable claims. That’s why organizations need to be familiar with their claims history and understand the overall health of their employees when they are making this decision. If the population is relatively unhealthy, for example, self-funding might be a challenge.

Another important factor to think about is their financial flexibility. Some organizations simply don’t have the cash flow available to cover unexpected claims if they come up. Others may need to know their costs ahead of time, and prefer the predictability of being fully insured.

What other factors should be considered?

Self-funding isn’t a short-term solution. It requires a full commitment and a long-term strategy. To actually control costs through self-funding, organizations need to manage their claims effectively. That means committing to keeping their employees healthy through wellness and disease management programs, as well as negotiating with health care providers.

It’s also critical for organizations to know exactly what’s in their contract — and to work with an insurance carrier or a third-party administrator they can trust.

Insights Health Care is brought to you by Medical Mutual

Selecting the right wellness vendor takes careful study

Wellness programs have become a staple of American companies over the past two decades. A 2012 study by Rand Corp. showed that 51 percent of all employers with 50 or more employees reported that they offered wellness programs.

The foundation for workplace wellness programs actually goes back to the 1970s, when government entities such as the National Institute for Occupational Safety and Health and the Occupational Safety and Health Administration were created to help ensure safe, healthful working conditions.

Over the past 20 years, the popularity of wellness programs has intensified, especially as health care costs have risen. But not all wellness programs are created equal as companies are finding out. Choosing the one that best suits a specific company can be a challenge.

“The characteristics and quality of health management and wellness programs can vary considerably,” says Stephen T. Doyle, senior director of Strategic Health Management Solutions at UPMC WorkPartners. “Business owners should make a careful study of their options before selecting a wellness vendor.”

Smart Business spoke with Doyle about what employers should look for in a wellness program.

What is the future of wellness programs?

It is obvious that with health care costs on the rise and participation-based incentives losing some effectiveness, the emphasis is shifting to programs that provide incentives (or disincentives) based on outcomes. Recent employer surveys have shown 52 percent of employers had outcomes-based incentives for tobacco use in 2013, and 33 percent offered outcomes-based incentives for biometric screening values such as weight, blood pressure and cholesterol.

To ensure continued participation and to maintain program momentum and success, programs often need to make significant shifts toward outcomes-based incentives.

What are some characteristics of successful incentive wellness programs that employers should look for?

An effective incentive program can be a powerful strategy for engaging employees and motivating behavioral change. However, while many programs may provide incentive strategies for specific behaviors, often these will fall short of addressing the whole population, given individuals’ specific health concerns or needs.

Each employer’s needs are different, and, therefore, wellness and health management providers need to be able to tailor programs to accommodate an organization’s particular needs.

Should wellness programs be integrated with other employee benefits?

Wellness and health management programs produce optimal results when integrated with an organization’s medical benefits. Integrating all employee benefits allows for seamless coordination of benefits and can provide the most complete picture possible of the health of the employee population, which in turn can help guide program direction and development.

Professionally trained and credentialed staff is needed to produce the best service. Ideally, staff should be involved in ongoing training and education initiatives.

In addition, a wellness and health management program provider should be readily accessible in the same geographic region as an employer. This allows for the most responsive service delivery and face-to-face interaction with employers and employees as needed.

Regular, customized reporting that summarizes employee utilization of programs and its impact on the organization is essential.

Are wellness programs the final answer to improving overall workplace health?

Achieving widespread and significant improvements in health risk levels, especially among workers at risk for chronic diseases, may require more than financially incentivized workplace wellness programs. Other workplace modifications — such as on-site health clinics and lifestyle and disease management health coaches on-site — may be needed to enhance the impact of workplace wellness programs.

Insights Health Care is brought to you by UPMC Health Plan

How fitness trackers can motivate employees to be more active

Fitness trackers are popular tools for consumers to monitor their physical activity. According to the Health Enhancement Research Organization, almost half of employers have introduced some version of the device into their wellness program — from simple pedometers to more advanced options.

By 2018, ABI Research predicts that employees will use more than 13 million devices as part of a workplace wellness program.

“Incorporating fitness trackers into a wellness program is a good way to create a long-term culture of health within an organization,” says Veronica Hawkins, Medical Mutual vice president of Government Accounts. “They can help employees stay healthy, plus counteract rising health care costs.”

Smart Business spoke with Hawkins about the benefits of integrating fitness trackers into an employee wellness program, how to encourage participation and why many workers have already embraced the devices as part of their daily physical activity — both at work and at home.

Why are fitness trackers getting so popular?

They can be very useful tools to help people manage their lifestyle. Walking is one of the best ways to get and stay fit, but most people don’t know how much they actually do in a day.

While pedometers served that purpose in the past, the new devices can do a lot more. They typically show your progress in real time, on a smartphone, tablet or computer. So it’s easier, and more fun, for users to track their progress to meet their goals — and eventually, to set new ones.

How can organizations take advantage?

Fitness trackers can usually be integrated into an existing wellness program, where there are multiple opportunities for employees to earn wellness incentives. Through various challenges, employees log data and receive messaging about their progress from their employer as well as the vendor. Employees start connecting online with co-workers, often leading to friendly competition that drives engagement.

Some organizations may even pay for the devices to encourage employees to get started.

What about incentives?

There are definitely a variety of strategies organizations can use, but it really depends on what’s going to motivate their particular employees. Some organizations might offer a day off for meeting a weekly or monthly step goal, or give out monetary incentives like gift cards.

Medical Mutual, which introduced the devices to its wellness program two years ago, contributes money into employee health savings accounts for meeting various step goals.

What else can make the process successful?

The goal of introducing fitness trackers to a wellness program is to help employees reach their fitness goals. But it’s also to affect real behavioral changes that become part of their life style.

To do that, organizations just need to make their programs fun and engaging. Simplicity is also important. The easier it is for employees to participate, the more sustainable any behavioral changes will be.

Are there common obstacles?

With the popularity of fitness trackers, employees are often excited to participate. But there can be concerns about privacy and sharing information with employers. It’s important to be clear with employees that the information is being used to benefit them, not penalize them. And, that only information relevant to the program, like total steps, will be tracked.

There are usually consent agreements employees have to sign to share their data, so they have a choice. But in most cases, this issue isn’t a significant barrier.

What are the first steps?

If organizations want to invest in fitness trackers for their wellness program, it’s a good idea to start with their insurance carrier. Many already have direct partnerships with companies that either make or distribute some type of wearable activity tracking device. There are usually opportunities for discounts, as well as additional benefits.

Insights Health Care is brought to you by Medical Mutual

Weighing the potential of wearable fitness technology

It’s only a gadget that attaches to someone’s wrist but it could be the future of health insurance. Or, it represents a major overreach by insurers and raises serious privacy issues.

“Devices that measure physical activity, heart rate, caloric expenditure and other biometric measures, often referred to as ‘wearable fitness technology,’ hold the promise of dramatically changing the face of the health care industry,” says Stephen T. Doyle, senior director of Strategic Health Management Solutions at UPMC Health Plan. “But we have to remember that this is innovation that is not without some risks.”

Smart Business spoke with Doyle about the potential of wearable technology and what employers might like and not like about it.

What about wearable technology is attractive to insurers?

With wearable technology, there is potential for accurate, real-time data. It can provide a continuous validation of an individual’s daily health behaviors, which over time build to define his or her overall health. These devices have the capacity to collect data in several areas, including physical activity, eating and sleep patterns. They provide relevant and customized feedback to end users, showing them areas where they’re doing well and areas of opportunity for them to improve.

Most devices function like a health coach or a trainer would from a goal-setting, monitoring and feedback perspective, but their added value comes from the fact that they’re always with you.

How likely is it that wearables will become popular enough to have an impact?

According to Pricewaterhouse Coopers, an estimated 20 percent of Americans currently own a wearable device. Of these users many are young. Millennials make up more than 50 percent of the population, and 53 percent of millennials say they’re excited about the future of wearable technology. Some estimates project the sales of wearables could gross almost $6 billion by 2018.

In addition, these devices are evolving in both design and capability, increasing their relevance and use. Early fitness monitors were generally expensive and obtrusive; only athletes, the very fit and/or participants in clinical or research programming used them. Now, with the myriad design options, the integration with other technologies (smartphones, smartwatches, etc.) and the reduced price point, these devices are bound to continue to expand in popularity.

Why are wearables seen as an effective way to promote wellness?

Wearable technology is generally affordable and easy to use. These devices could track the user’s fitness activities, sleeping habits, body temperatures and heart rates to deliver real-time, relevant health information.

By leveraging the data produced from these devices, the potential is there to improve health and reduce health care costs over time by modifying daily health behaviors, while also improving preventive care. Wearable technology could advance population health management and allow an individual’s health care provider to support them in a more proactive and effective way.

Wearable technology is not a silver bullet, nor does it replace the relationship between a patient and physician. However, the data these devices produce can enable health care organizations to develop more effective and personalized approaches to care, which can improve the health of a population and reduce costs.

What issues are raised by wearable technology?

The concerns over these devices and their use in health care and health insurance are typically around privacy and confidentiality. This, as with any protected health information, needs to be kept in accordance with all applicable laws and shouldn’t be shared with an employer or other entity without appropriate consent from the user.

There’s also concern over how the information would be used. This is a natural concern that occurs with the introduction of any new technology that requires an element of personal information disclosure to function most effectively. Many mobile apps, such as banking apps or travel apps, are great examples of how initial concerns over information sharing dissipates as technology becomes more ubiquitous, personalized and relevant to the individual.

Insights Health Care is brought to you by UPMC Health Plan

How employers can save money with best-in-class health plan design

One of the best ways to control your health costs and trends is through your plan design. That’s why a self-funded environment provides an advantage for employers, says Mark Haegele, regional vice president of sales at HealthLink.

“There’s more to plan design flexibility, and you can take ownership over the plan design to change participant behavior,” Haegele says.

Smart Business spoke with Haegele about some best-in-class plan design practices that employers can incorporate into their plan design to help save money.

How does pay for performance work?

This term is broadly used throughout health care, but for plan design it means properly aligned incentives and paying for the performance of members and health care providers.

A provider might be reimbursed, based on how it performs according to metrics. If a primary care provider treats a member, it’s hard to quantify if that member is receiving the appropriate levels of care unless you set up a performance metric and engage on it.

Not only can health care providers and hospitals be reimbursed for performance, it works for members, too. The plan design can reimburse members based on their commitment to seeking and ensuring they meet the minimum levels of care for an illness or their overall health. Is their blood pressure, cholesterol and body mass index in range? If they are in check, your employees and their dependents might get dollar credits toward their premium.

You can also measure upwards of 30 chronic conditions for the minimal levels of care associated with those conditions. If a member meets that treatment protocol, you can either 1) pay for those minimum levels of care or 2) ensure that member gets credit toward his or her premium.

What are benefit carve outs?

In a self-funded plan, you can provide preferred pricing and providers for certain services that are carved out of your normal benefits. This includes things like dialysis, cancer, certain elective surgeries, laboratory or high-cost imaging.

Very specific language can be incorporated to help manage these cost items. Not only are you putting a limit on it, you’re also directing members to certain facilities.

How do member self audits help cut costs?

It has statistically been proven that when members get care, health care providers will make mistakes and bill for services that members didn’t receive. There have even been extreme examples where somebody has his or her broken arm set and gets billed for a hip replacement. Because there’s no mechanism to scrutinize these billings, mistakes often don’t get caught.

You can set specific plan language, so that if members ask for a list bill from their hospital stay (whether it’s in or outpatient), identify services that they didn’t receive and then get them eliminated from the bill, the employer shares the savings with the member.

What does ‘not to exceed’ language mean?

This is true reference-based pricing, with a list of common health procedures and the maximum that the plan will pay.

For example, a health network might determine knee replacements in your region on average cost $15,000. It also finds five facilities within 20 miles that charge $9,000. So, your self-funded plan might state that it will provide members with knee replacements, not to exceed $10,000.

It steers behavior and forces the member to ask questions and have a dialog with the insurance company, third-party administration or network about the cost.

How can state mandate exclusions be incorporated into plan design?

Under a fully insured environment, insurance companies have to cover everything that the state mandates. For example, bariatric surgery and infertility treatment have to be covered in Illinois.

If you’re self-funded, your plan design language can exclude state mandates. It highlights the fact that you have flexibility and control as a self-funded employer. You could even say: I’ll cover 50 percent, instead of the state mandated 80 or 90 percent.

Plan design features in a self-funded plan allow you to exercise more control over your health care costs, which is something that many employers are looking for.

Insights Health Care is brought to you by HealthLink

How to encourage healthier behavior in your employees

Employees are a company’s greatest assets — but their health issues can dramatically affect the workplace. Employees who aren’t healthy have lower productivity and higher health costs. The cost of health care has a major impact on a company’s bottom line, says Carla M. Flamm, account manager III at HealthLink.

According to the National Center for Chronic Disease Prevention and Health Promotion (CDC):

  • Four of the 10 most expensive health conditions for U.S. employers — high blood pressure, heart attack, diabetes and chest pain — are related to heart disease and stroke.
  • Work-related stress is the leading workplace health problem and a major occupational health risk, ranking above physical inactivity and obesity.
  • Productivity losses linked to employees who miss work cost employers $225.8 billion, or $1,685 per employee, each year.
  • Full-time workers who are overweight or obese and have other chronic health problems miss about 450 million more days of work each year than healthy workers.
  • A 1 percent reduction in excess weight and high blood pressure, glucose and cholesterol levels has been shown to save $83 to $103 annually in medical costs per person.

Smart Business spoke with Flamm about how to talk to your employees about their health.

How does encouraging healthy behaviors specifically benefit employees?

Employers have a responsibility and unique opportunity to promote individual health and foster a healthy work environment.

There are many reasons why people don’t take an active approach to their health. They may not know how or may lack the necessary tools. Providing relevant information and resources encourages employees to take personal responsibility for their health.

How does this benefit the employer?

As a result of your efforts, you can reduce health care costs. Plus, healthier employees equal greater productivity, higher morale and less absenteeism.

As employers of all sizes recognize these benefits, they are offering more wellness programs to their employees. According to the CDC, in 2014, 73 percent of companies with three-199 employees and 98 percent companies with 200 or more employees offered at least one wellness program as part of their health benefits.

When it comes to encouraging healthy behaviors, what are some best practices?

Senior leadership must drive the program. Some of the most common offerings include smoking cessation, discounts on gym memberships and distribution of monthly/quarterly reminders on relevant health related topics (i.e. healthy eating, stress management, self-care).

Many employers think about individual actions like quitting smoking, but you should also consider strategies designed to influence the overall work environment, not just one employee.

Does it matter how you communicate, and how can you ensure this is actually effective?

You’ll want to use the appropriate communication channels that fit your employee audience. Some examples include Intranet, posters, payroll stuffers and lunch-and-learns.

In order to ensure your communication doesn’t come across as lecturing or become one more piece of information that nobody looks at, you should create a wellness committee/team. This team from all levels of management can encourage feedback and help create a supportive work environment.

Why should you measure your effectiveness?

Measuring the effectiveness of your communication is just as important as delivering. Change rarely happens overnight. You’ll want to set realistic objectives and goals, and then determine if those goals were met and develop next steps.

In order to achieve engagement, employees must receive regular and effective communications, which are timely and relevant. It is critical that the employer determines how well the program has been received — listen to your staff and change your program activities if your employees are not engaged.

Insights Health Care is brought to you by HealthLink