When employees hear the term “consumer-driven health plan,” they may panic. The thought of a high-deductible plan that only covers preventive care until that deductible is met can sound scary to employees used to a system of co-pays and co-insurance.
So if you are moving to this type of health plan, you need to start explaining it early and include a tax expert to show employees how they may actually benefit, says Randy Ressel, vice president in Missouri for HealthLink.
“You need to make this decision well in advance of open enrollment and then help employees understand why you are making this change,” says Ressel. “This is the time for a frank talk from the CEO, because if employees don’t get that, they will suspect the change is something they are not going to like, that is going to cost them and that it’s going to benefit the company. But that is not necessarily the case, so you have to tell them, and tell them again, because it’s different from what they’re used to.”
Smart Business spoke with Ressel about consumer-driven health plans and the steps you can take to ease the transition for your employees.
What is a consumer-driven health plan?
It is a high-deductible health plan that meets IRS codes for having a health savings account attached to it. Nothing is covered with the exception of preventive care until you hit a high deductible, generally $2,500.
The plan is accompanied by a health savings account. Similar to a 401(k) plan, tax-deferred money goes into the account. But unlike a 401(k), in which taxes are paid when money is withdrawn, funds in an HSA are withdrawn and used tax free on approved expenses.
That can be a huge benefit. For example, if you are taking a prescription drug for $100 a month, under a consumer-directed health plan, you are not going to have drug coverage. So if you pay cash, you pay $100 of after-tax income. But if you are in the 25 percent tax bracket and pay out of your HSA, you effectively save $25 because you are paying with pre-tax dollars.
How can a company get started on the transition?
Timing is everything. This is not so much a benefit change as a cultural change. Instead of insurance companies driving care, consumers are the ones making the decisions and driving outcomes, which is a very big change.
Talk early and often about that culture change and make decision-making tools available to employees. Employees can input personal information, along with their health care expenses last year, to help quantify the cost of going to an HSA. Education sessions should begin at least 90 days before the effective date, and attendance must be mandatory. Otherwise, employees will arrive at open enrollment and hurry through the process without understanding their choices. And that is the worst possible situation to be in.
How should a CEO present the plan to increase the chances of employee buy-in?
The CEO should say, ‘We’ve all heard how much health insurance costs are going up. You may not see it because we pay for the majority, so while you may think you are paying the full amount of the increase, that is not the case.’ This presents an opportunity to tell employees exactly how much the company has paid for benefits. Tell employees that you foresee issues down the road with the cost of employee benefits, and because you want to continue providing these benefits, you need their help in using health care dollars wisely.
How can employees help keep costs down under a consumer-driven health plan?
First, use generics. There is a huge variance in drug costs, and generics allow you to retain a larger amount of money in your HSA, so if a big expense arises, it won’t wipe out your fund.
Second, patients should ask their doctors questions. If a doctor recommends an MRI and surgery, ask if there are other options. If he or she says no, then ask about the least expensive place to get an MRI. The cost in some cities can range from $600 to $2,300, so if you are paying out of pocket, it pays to find the least expensive option.
How can employers encourage employees to participate?
One of best ways is to take the employer cost savings from the plan and allocate it into the HSA of anyone who elects that coverage. You can also offer incentives. For example, if someone has asthma and is contacted by a health coach, and the employee agrees to participate in a program, the employer could deposit additional funds. Or if an employee agrees to quit smoking, the employer could contribute funds. That’s a real incentive to get people to be healthy.
Also, the culture of change must begin with management. If there are three plans to choose from and the CEO chooses something other than the consumer-driven health plan, employees won’t buy in. You have to lead by example.
The same is true with weight loss, health risk assessments and other things you want people to do. If you’re not doing them, too, it’s less likely that employees will participate. Establishing weight loss or walking competitions can also have a positive impact on health, and offering rewards for the winning team will encourage employees to participate.
Finally, give employees regular feedback about how the plan is performing. That is key. In your original CEO talk, you said you are doing this because you’re afraid that if you don’t do a better job managing health care dollars and improving health, you won’t be able to provide this benefit down the road.
So how’s it going? Quarterly, or at least semi-annually, tell employees what the budget is, what you’ve done so far and whether you are doing well, or need to do more work. This gives them a vested interest in continuing to buy in to the program.
Randy Ressel is vice president of sales in Missouri for HealthLink. Reach him at (573) 651-4940 or Randy.Ressel@wellpoint.com.
Your company offers medical benefits, and it offers pharmacy benefits. But if you are not integrating these two components, you may be spending more than you need to, says Mark Haegele, director, sales and account management at HealthLink.
“Having both data sets boosts your ability to see the whole picture of your members and your costs,” says Haegele. “It really opens the door for new opportunities to control costs. If you just have the medical claims data, or just the pharmacy claims data, that only gives you part of the picture. But when you integrate that information and tie the pharmacy claim information into the medical claim information, then, all of a sudden you start to see the full story relative to specific members and, in particular, specific cost variances. And that really opens the door to do some pretty creative things with information, ultimately allowing you to control costs.”
Smart Business spoke with Haegele about steps an employer — particularly a self-insured employer — can take to manage health plan costs.
Why should employers integrate medical and pharmacy claims data?
Having that data under one umbrella can help improve care by creating a complete picture of a member’s health. Integration increases the identification rate for chronic conditions and care management programs as a result of improved access to key data.
It allows for better case management, increasing the likelihood that patients will receive the correct medication at the right time, avoid negative drug interactions and help members comply with prescribed therapies. In addition, patients with chronic diseases often do not get the help they need, resulting in more severe and costly complications, and higher rates of diseases and death.
How can an employer use integrated data to manage costs?
If you combine your pharmacy and medical data, you can then sort your data by members who have more than five prescriptions per year. You can further refine that information to determine from how many different physicians a member may be getting a single prescription.
For example, oxycodone is a very common concern in the marketplace, and an employer may have health plan members who are getting that prescription from five different providers. Without that integrated data, you wouldn’t know that. But by targeting controlled substances, you can identify those who are abusing the plan and then, in conjunction with your consultant or broker, notify those prescribing physicians so that they become aware of that situation.
Employers are often shocked to learn what is in the data. A plan member who is getting 15 or 16 prescriptions per month from 10 different doctors is clearly problematic, and identifying those people can help you control your costs.
What other action can an employer take using integrated data?
The second specific action that employers can take to control costs is to look at the use of antidepressants. This is a high-cost category, often in the top three most used prescriptions, which presents an opportunity.
Antidepressants are generally intended to get a person through a tough time, for example, as the result of a death or a highly stressful situation. Most are not really intended for chronic continuation for multiple years. When an employer has the data, it can identify those members who have been on antidepressants for more than a six-month period. Then you can introduce that member to a case manager, or into an employee assistance program, or refer that person to a psychiatrist for one-on-one therapy. Oftentimes, with three or four session — which are typically purchased by the employer anyway in an EAP — the member feels better and is able to get off of those drugs, reducing both usage and costs.
How can integrating medical and pharmacy data help employers assist members with chronic illnesses?
Employers can pull the data for members who have been diagnosed with one of five chronic illnesses — cardiovascular disease, hypertension, asthma, diabetes and COPD — then, with their consultant, identify whether those members are on a routine and taking their prescriptions for that specific illness. You can see if members are compliant, based on their refills, and can identify those who are not.
As an employer, you can then do a number of things to increase compliance within those categories. The employer can offer to pay for those drugs, because even though they are generally inexpensive, some members may not take them if they are living paycheck to paycheck. By simply paying for those drugs for its members, an employer could save the plan a lot of money.
You can also make a strategic decision as an employer, especially in a self-funded environment, to get members to work toward trying to achieve a better compliance rate. You can use your medical data to identify those members who have these diagnoses and couple that with your pharmacy data to identify those who are taking prescriptions.
Look at a 12-month period and how many scripts per month members are taking to identify any tailing-off patterns because refills have not been made. Maybe someone filled the first 90-day prescription, and the second one, but then never got it again.
What happened? How do you get the member back on track? Does the employer need to pay for the drugs? Do you need to assign a case manager to that member?
All of these things are fairly simple, straightforward specific actions that employers can take in their health plan to control costs and improve the health of their members.
Mark Haegele is director, sales and account management at HealthLink. Reach him at (314) 925-6310 or Mark.Haegele@healthlink.com.
Obesity can have a significant impact on employers, in health care and workers’ compensation costs and in lost productivity.
Health care costs for obese employees are as much as 21 percent higher than costs for those at a healthy weight. In addition, overweight or obese full-time workers with other chronic health conditions miss 450 million more days of work each year than healthy workers, costing businesses $153 billion in lost productivity, according to a Gallup poll. When you consider that Centers for Disease Control estimates say that one-third of Americans were obese in 2010 and that six in 10 are overweight, that creates a significant impact on U.S. businesses, says Steve Martenet, president of HealthLink.
“Many Americans receive their health care through their employers, and obesity impacts not only general health care costs but also other costs,” says Martenet.
Smart Business spoke with Martenet about the impact of obesity on businesses and what they can do to combat it.
How can employers begin to combat the obesity epidemic?
Biometrics can provide a snapshot of the health of your employees. If 75 percent of your work force is classified as obese, you are looking at a very different solution than if that were 5 percent. The higher the percentage of obese employees, the more those people are costing your business.
Once you understand how much obesity is potentially costing you, you can determine the best plan of attack to try to manage that. It starts with creating a culture around general health and wellness and fitness, and a culture around transparency in which employees know how much benefits actually cost — just not what the co-pay is — and then create awareness around what employees can try to do to positively impact those costs.
How can biometrics help improve health?
It’s a matter of education. Once they understand where they are in terms of BMI and their health conditions, it’s easier to get people to adopt certain behaviors and take steps to address those conditions. Biometrics lets them know what shape they are in and allows them to understand what they need to start doing to take control of and improve their overall health. If people know they have a certain BMI and understand what that will mean in 10 or 15 years, they may be more willing to take actions today to address that so they will be healthier in the longer term. Being healthier will ultimately cost them, and their employer, less in premiums for health insurance.
How can employers make employees care about costs associated with obesity?
Educate them about how health care is financed, how much employers are paying in premiums and that premium costs are tied to claims. The more claims a company has due to unhealthy lifestyles and obesity, the more you’re going to pay in premiums, which is potentially less that employees have to take home in disposable income. That makes it real that there is a dollars and cents impact on employees.
Educate them through meetings, e-mails or brown bag lunches. Another effective way is a quarterly statement that shows employees their total compensation package: This is cash compensation, this is vacation compensation, this is how much your health insurance premium is, this is how much goes to the 401(k). Then they get a total picture of what that employer is funding.
Once they understand how much the employer is really paying for health insurance you can start educating them on what drives that premium. That presents opportunities to make real changes in their personal behavior, managing chronic conditions and improving their lifestyle. They can see that what they do is directly related to premium costs and their overall compensation. If one segment of the pie gets too big, other segments — such as pay or 401(k) contributions — get smaller
How can you encourage employees to participate in wellness programs?
Employees are more likely to buy in to an employee-led initiative if they have a hand in creating the program. That said, however, you have to lead by example. If management is not involved, it’s easy for front-line associates to not take it seriously. Executives have to be part of the health screenings and be active in their participation in the program.
How does obesity impact workers’ compensation costs?
Obese workers are more prone to injuries on the job, and it takes longer for them to recuperate from those injuries, driving up workers’ compensation costs.
According to a Duke University survey, employees with a BMI of 40 or higher had 11.65 claims per 100 full-time employees, at an average cost of $51,091 per claim and 183 lost work days. Employees with a healthy BMI had 5.8 claims per 100 employees, at an average cost of $7,503 and 14.19 lost days. When you look at the numbers, they are staggering.
How can childhood obesity impact employers’ costs?
In much the same way that employees do. Medical costs for obese children are higher, and if they have health problems, that leads to lost productivity for the parent. If a parent is at work and worried about an obese child and the social ramifications of obesity, they are not truly focused on what they need to be doing at work. It’s a little more difficult to address, because what you do in the workplace may not make it home.
However, employers can offer educational materials that go down to the child’s level about eating healthy. Employers also have the option of purchasing wellness products built around creating a culture of health.
Ask your health plan administrator what services it offers around health and wellness to help create a culture of health and wellness in the organization.
Steve Martenet is president of HealthLink. Reach him at (800) 624-2356 or SMartenet@healthlink.com.
With employers facing ever-rising health insurance premiums, most are looking for a way to control costs.
To do that, they are increasing co-pays and deductibles, or decreasing benefits. But there are other steps you can take to accomplish that goal without impacting benefits or increasing employees’ costs, says Mark Haegele, director, sales and account management at HealthLink.
“Lowering the cost of health care is driven by managing utilization,” says Haegele. “There are a number of things in your data covering members’ use that you can address to help control costs. Too often, people are not educated about alternatives to the emergency room, and educating them can help control costs.”
Smart Business spoke with Haegele about how to lower the cost of health care without modifying benefits.
Where should employers start?
From 1996 to 2006, the annual number of emergency visits grew from 90.3 million in the U.S. to 119.2 million, and from 34.2 to 40.5 visits per 100 residents. So start by looking at emergency room usage and other high utilization data points to identify trends in your health care that are areas of concern. Those are the areas you should focus on and on which you can ultimately have an impact.
Emergency room utilization is something very tangible that you can get your arms around. Identify if overuse of the ER is an issue, and, if it is, identify what is driving it. Then you can implement action plans to correct it and to lower the cost for that high-cost category.
What should an employer be looking for?
First, over the last three years, has the number of visits per member per month gone up year after year? And has the cost per member per month gone up year after year? If the answer is yes, ask why. It will help you understand what you can do to control that cost category without cutting benefits.
Look at frequency of visits per person to identify whether there is a subset of people who go to the ER 10 or more times a year. If there is, you need to determine how to address those people. Do you need to have case management nurses reach out to them to help them find a better path to care? Do they need help finding a primary care physician? Can you educate them on more appropriate levels of care that are available?
What other patterns in ER utilization should employers look for?
Employers should look at the reasons for ER visits. There are two categories — symptom, injury or poisoning; and disease and virus. If someone breaks an ankle, that person is going to the ER. But the disease and virus category is a different story. We find that more than 60 percent of ER visits are for disease or virus, for things such as sinusitis, flu, cough, headache, etc.
This category can be managed. There are 24-hour nurse lines, urgent care clinics and clinics in pharmacies, and all of those are lower-cost alternatives for that category. The cost of the ER averages $800 to $900, versus as little as $65 to $150 for the alternatives. If more than 50 percent of ER visits under your plan fall into this category, you know where to focus your energy. Then you can implement specific action plans to modify utilization and create awareness.
How can employers create that awareness?
Education is the No. 1 thing. Post information for employees, do e-mails blasts, distribute articles on proper use of the ER, do payroll stuffers, anything you can to get the word out that there are alternatives to the ER.
A lot of employers have penalties, so if an ER visit is not a true emergency under the plan design, it doesn’t pay. But hospitals have ways of getting around that. Typical plan designs waive that penalty if a patient is admitted. Guess what? Now your admissions just went up.
A better approach is to educate people so they know the proper use of the ER. And explain that if the ER coinsurance is $150, that’s $150 out of their pocket, whereas, if they went to an urgent care center, the cost is much less. And oftentimes, the wait is shorter, as well. Sell your members on appropriate lower levels of care that are more easily accessible, less expensive and more convenient.
How do hospitals play into the equation?
Hospitals are not off the hook. Hospitals code ER visits from one to five, with five being the most severe cases, but some hospitals never code lower than three. As a result, we recommend to employers that, if they identify a hospital overcharging for ER visits, they address the issue with the hospital.
The employer, in conjunction with the insurance company, can co-write a letter explaining its issues with the ER. Say, ‘We’d like you to consider two things. One, reconsider the way you’re coding ER visits, and, two, consider establishing an urgent care center for lower level visits to your facility.’ One letter isn’t going to result in a new facility, but it does create awareness of the way it codes, and we will often start to see coding that is more appropriate. By showing the hospital the data demonstrating high coding levels for low levels of care, you create awareness.
The employer, the hospital, the member and the insurance company all have to work together to address this issue. As an employer, look at your benefit design and ways you can support the insurance company to educate members. It is the responsibility of members to do what is good for them, keep dollars in their pockets and appropriately use their benefits. Hospitals and providers have a stake in the game, as well. Everyone shares equal responsibility in managing this.
Editor’s note: The ER is just one category of many in which employers have the ability to impact cost. In coming months, HealthLink will address other categories, including high-cost imaging, implants, 23-hour observation and surgery.
Mark Haegele is director, sales and account management, at HealthLink. Reach him at (314) 925-6310 or Mark.Haegele@healthlink.com.
As an employer, you may see your employees simply as workers, hired to help you achieve an end.
But they are real people, with lives and problems outside of work, and those challenges could impact their productivity on the job, says Greg Banks, HealthLink EAP account manager.
“Whether you like it or not, your employees’ personal lives follow them inside your property line every single day and affect their ability to do their jobs,” says Banks. “If you ignore that, that’s your choice, but it’s not what’s real.”
Smart Business spoke with Banks about how contracting with an employee assistance program (EAP) can help employees deal with life’s challenges, improving both their personal lives and their productivity on the job.
What is an EAP?
EAPs are not a new concept. Beginning in the late 1970s, most large companies had internal EAPs that mostly focused on alcohol and drug use. Today, most EAPs are through an external vendor provider program and there is a much broader scope in the service menu. They still do alcohol and drug counseling, but, from an employer perspective, the benefit is about productivity.
An EAP provides employees who are facing a challenge in their personal lives with a resource that they can easily access to help them solve that problem, so they can be where they are supposed to be at work, doing what they are supposed to be doing, and doing it safely and with full presence of mind.
From an employer perspective, if someone has a cocaine problem, it is in some ways no different than someone who has a childcare problem. If the result is that they are not at their job, getting the job done safely and in the way that it is supposed to be done, the bottom line to the employer is the same. And that’s where the EAP comes in. It’s about risk management and employee productivity.
They’ve become the norm at large organizations, but they have also made the leap into mid-sized and smaller organizations.
Is it costly for an employer to offer this service?
No. It’s very inexpensive, less than $2 per employee per month.
The service menu is very deep, offering legal, financial, childcare, elder care, drug and alcohol counseling, etc., but the services are capped. The EAP provider is responsible, for example, for four counseling sessions, but it doesn’t have to put the employee in the hospital and pay those bills. That is the responsibility of the health plan. There is a limit on those benefits, so it is a fairly constrained risk.
The other factor keeping the cost low is the Internet. EAPs can deliver more services to more employees with fewer people because of the electronic tools available today.
Can an employer mandate that an employee seek help through an EAP?
Ninety-eight percent of the time, it is the employee or a household member who initiates contact. However, it is also an option for employers to coordinate EAP services with corrective action or a performance improvement plan to help someone save his or her job. For example, if someone has a problem and that person’s performance has deteriorated, the employer, in the process of dealing with this person, can bring in the EAP, which can case manage that situation with that employee for a period of time.
What would you say to employers who say their employees’ personal lives should remain private?
First, the service is confidential. While the employer will get a report stating which services were accessed and how often, it will not know who accessed them. The CEO won’t be able to distinguish the CFO from the newest hire in the report.
Second, all you’re doing is giving people who are having problems a way to get some help so that they can continue to be at work and be able to do their jobs. Rather than sending employees home if they are having a problem and leave them wondering what they should do, the EAP gives them a path. And when that path is sanctioned by the employer, it gains legitimacy in people’s minds.
The employer is acting as a vetting service, saying these are good resources, you can trust them and they are legitimate and credible resources. That makes it easier for people to take that first step and seek the help they need.
When an employee calls the EAP, how does the process work?
The nice thing about an EAP is that it’s not just one service or another. For example, say a woman has small children, is caring for elderly parents and is feeling overwhelmed. That person might want to see someone face-to-face for support and clarification about why they are waking up at 3 a.m. and why they are yelling at the kids.
But she may also benefit from assistance related to elderly care services, so there’s an elderly care consultant brought in. She may also need assistance with after-school activities for the kids, and maybe some financial planning to work on a budget that has been challenging for her. There is not a boundary on how many different kinds of services the employee can choose when she picks up the phone and calls.
If someone is really not doing well in life, an EAP is a great front door, a way to access critical services for mental health issues, drug and alcohol problems and other life challenges. For a very small investment in EAP services, an employer can help employees live happier, healthier, more productive lives.
Greg Banks is a HealthLink EAP account manager. Reach him at (720) 225-6724 or Greg.Banks@wellpoint.com.
Health care fraud costs the nation more than $200 billion a year, accounting for between 5 and 10 percent of health care expenditures.
That’s about $800 a year per person with health care coverage, a cost that is reflected in increased premiums, says Howard Levinson, clinical fraud director of the Special Investigations Unit at HealthLink.
“Fraud also results in lost benefits, inaccurate medical records and increased out-of-pocket spending by patients,” says Levinson.
Smart Business spoke with Levinson about health care fraud, and what employers and their employees can do to help curtail it.
What is health care fraud?
A small percentage of dishonest health care providers commit fraud for financial gain, using the health care delivery system to do so. Fraud can also be committed by members and insurance brokers, medical identities can be stolen, theft occurs, but much of the fraud and abuse we investigate are committed by health care providers, whether that is a single doctor, a hospital system, a pharmacy or a medical equipment company.
What are some examples of fraud?
One of the most common health care frauds is when an unscrupulous provider bills for services not rendered. With millions of claims submitted each year to insurance companies, it is impossible to ensure that every claim is accurate. The insurance industry relies on providers to be truthful. As a result, providers can submit fictitious claims or add on services that they didn’t perform so that they will receive a higher payment.
Fraud can also occur when services are misrepresented. Providers may know that a particular treatment, therapy or drug won’t be paid for by the insurance company, so instead of billing what they actually did for the patient, they misrepresent that service as something else, something that is payable by the insurance company.
Upcoding is another common form of fraud. When a patient visits the doctor, every service is assigned a code for billing. The fraudulent provider may submit a claim with codes that indicate the doctor rendered a more comprehensive level of care than what was done. For example, a patient may be healthy and go for a basic checkup, but the physician bills as if the patient were really sick, exaggerating about how much work he or she did in order to get paid more.
How can employers and their employees help reduce the risk of fraud?
Employers should educate their employees about the importance of paying attention to the explanation of benefits they get in the mail after they’ve received health care services. Look for items that might not be correct, or for services that were not performed. Tell employees to check their bills and EOBs to make sure they received the services they and their insurance company are paying for. Too often, members throw away these EOBs without reading them because they can be difficult to understand. Employers could work with the insurance company to assist their employees in deciphering the EOBs.
Employers should also educate employees about medical identity theft, in which someone steals medical ID numbers, then bills services to the insurance company. While this results in charges for services not rendered, it can also wreak havoc on the member’s medical records. For example, if someone is using your medical identity to bill your insurance for HIV infusion therapy drugs, now you’re saddled with a diagnosis of HIV and a record of having received hundreds of thousand of dollars worth of drugs. You may be perfectly healthy, but it can be very difficult to clear that up and get insurance somewhere else.
In addition, make sure that employees are sensitive to the fact that they shouldn’t give out private health care information to anybody who doesn’t have a need for it. And members should be very careful choosing a doctor that they trust and that the doctor or his or her staff are not going to do anything untoward with their health care information.
Health care fraud is a violation of your trust by your doctor, hospital or pharmacy, etc. Anything an employer can do to instill a culture of ethics among its employees can help decrease the risk of fraud.
How can fraud impact patient care?
Patients may not actually be getting the services that they need. If you’re going to doctors whose primary focus is not on your health care but on how much money they can get out of your insurance company, are you getting the proper treatment? Often, when fraud is occurring, patients are not.
They’re undergoing expensive diagnostic tests that they don’t need. Or the doctor may not be doing the right tests because he or she is more involved with patient’s insurance card than with the patient’s health.
What can an employer or employee do if fraud is suspected?
Most health care insurance companies have fraud hotlines that you can call to report suspected fraud. Or if you’re not comfortable calling the hotline, report your concerns to your HR department. Some significant fraud investigations have started with patients calling to say they were billed for something they didn’t receive or that the doctor only spent five minutes with them and they were billed an exorbitant fee.
We need the assistance of our insured members to weed the garden of bad providers. We don’t want members to be treated by fraudulent doctors. It’s wasted health care dollars and dangerous to the health of members. Our investigators, often in cooperation with law enforcement, are working to identify the fraudsters, investigate, intervene and then remove them from the system. Health care fraud increases all of our costs. If you can get your employees to recognize potential fraud and abuse and pay attention to it, your company could see improvements to its bottom line and keep your employees healthy.
Howard Levinson is clinical fraud director of the Special Investigations Unit at HealthLink. Reach him at (314) 923-6203 or Howard.Levinson@wellpoint.com.
When your employees don’t understand the true cost of health care, they may make decisions that cost you money.
But you can change the way they view health care and your role in providing it to create members who are healthier and wiser consumers of health care, says Randy Ressel, vice president of sales in Missouri for HealthLink.
“Too many employees don’t understand the true cost of health care,” says Ressel. “They pay a $4 co-pay for a prescription and think that is the entire cost. Employers need to remove barriers so they understand the cost.”
Smart Business spoke with Ressel about how to help your employees become better consumers of health care.
How do you begin to change the culture?
Taking co-pays out of your health plan is the first thing because it allows employees to see the true cost of care. The second thing is to provide an incentive to do something about that cost. An employee may understand that a generic medication will cost them $4 instead of $35, but other than that co-pay, it doesn’t make any difference to them. That’s where health savings accounts come in.
How can health savings accounts make employees more conscious of cost?
With an HSA, if a member conserves funds, that becomes their money. It rolls over every year, and when they leave, that money goes with them. That money can have the same effect as a 401(k). But a 401(k) is tax preferred, and when you take withdrawals, it’s taxed. With an HSA, if you use it for approved medical expenses, there are no tax consequences.
HSAs can also provide savings to the member. For example, if you pay $100 for a medication, you are paying the full $100 with after-tax money. But if you pay out of your HSA, that is pretax money. If you’re in the 40 percent tax bracket, your effective cost is only $60, which is a dramatic savings.
How can an employer encourage employees to choose this option?
Typically, HSAs are coupled with a high-deductible plan, with a $2,500 deductible on calendar year basis. The plan then pays 100 percent after that. The biggest objection employees have is that $2,500 is a lot, but prescriptions and doctors’ visits add up quickly.
To encourage employees to choose this option, you can contribute to the employee’s HSA. If your cost for a traditional plan is $500, and the high-deductible HSA is $300, you can take half of that savings — $100 — and put it into the HSA. That is very persuasive.
What is the next step?
Once employees have a financial reason to participate and understand the reasons behind it, then you have to address their health, as improved health results in a lower demand for goods and services from doctors, hospitals and pharmacies.
For example, if employees are taking cholesterol medication and lose 10 pounds and exercise, they might be able to go off that medication. If they conclude they can save money and improve their lifestyle, now you’re cooking with gas.
The challenge is helping them understand it. That’s how you change the culture. You don’t change it by beating them over the head, or penalizing them. Instead, show them why it’s in their best interest, both financially and for their health. And if employees are healthier, they’re happier and they miss less work, which is a good thing for them and a great thing for the employer.
How can an employer encourage healthier behaviors?
It has to start at the top, with the CEO and CFO. You can’t just talk the talk, you’ve got to walk the walk. Your employees aren’t stupid. They’re going to watch what you do. If your top executives choose traditional plans, your employees are going to follow suit.
You have to lead by example. If you put a wellness program in place, as the CEO, you can’t be 100 pounds overweight. It just doesn’t work. You can also provide healthier foods in vending machines. One of our companies provides apples, bananas, carrots and broccoli. Those cost 50 cents. You can get Twinkies, as well, but those are $4. They’re not telling employees they can’t have Twinkies, but they are providing an incentive to buy the apple.
How can a work exercise program encourage healthy behavior?
You can provide an exercise area, but people don’t want to stay after work to exercise. So give them 30 minutes during the workday to exercise. Some might argue that’s a demanding cost to the employer. But the average employee makes $20 to $30 an hour, so half an hour costs you $10 to $15.
If you can take someone who is pre-diabetic and keep them from developing diabetes, you could save half a million dollars over the lifetime that they’re on your health plan. It’s a very cost-effective strategy.
It also improves employees’ attitudes and productivity, and makes you a coveted employer to work for.
What are other inexpensive ways to encourage healthy behaviors?
Take control of employees’ screensavers with messages about how to be healthy, eat healthy and cook healthy. If people see these often enough, they start to get it.
Couple that with contests to make them healthier, anything to make it fun for them to do the right thing, and award prizes. Individual contests are good, but team contests are better, because then you’ve got peer pressure.
It’s not a cost shift; it’s an effort to enlighten people about the true cost of health care, giving them an incentive to do something about it and then supporting them with the tools to make the right decisions.
The results don’t happen immediately, but those companies that do these things are the ones that will experience lower-than-average rate increases on their medical plans over a period of time.
Randy Ressel is vice president of sales in Missouri for HealthLink. Reach him at (573) 651-4940 or Randy.Ressel@wellpoint.com.
You provide health coverage to your employees, but do you really understand how they use it? And are you helping them get the most out of those benefits while discouraging utilization of services that may not be medically beneficial?
If you’re not, you could be paying for services that are not beneficial, or employees may be costing you more by consuming services that aren’t medically necessary. And that’s where a medical management firm can help you both save money and benefit your employees, says Nancy Sublette, R.N., M.H.A., business change manager, Sr., at HealthLink.
“Employers should explain the services that are available to members, make contact information about those services readily accessible and assure members that information obtained in the provision of services is not shared with the employer,” says Sublette.
Smart Business spoke with Sublette about how engaging a medical management firm can reap rewards for you and your employees.
What is medical management?
Medical management is the name for services within a health plan that evaluate the medical necessity of a procedure or medical service, and help members help themselves.
For example, case management is often employed in catastrophic cases. Following a discharge from the hospital, a member might need support services. The case manager can direct the member to available services and help coordinate those services, providing somebody for that member to reach out to.
However, a lot of people are adverse to someone getting into their personal business, and for that reason, may refuse case management.
How can the medical management firm, and the employer, help the member overcome that resistance?
When nurses are able to talk to the member and the member doesn’t instantly put up a brick wall, they can generally develop a relationship.
On the employer side, communicate that services are available and that the employer does not receive information gathered in the provision of those services. People have concerns, when their health insurance is through their employer, that the employer is going to have access to their medical information, and that is not the case. HIPAA regulations created the rules for keeping information confidential, and it cannot be used for employment decisions.
How can utilizing a medical management firm benefit an employer?
If people know about their disease and how to take care of themselves, and they have support to find the services that they need, then they will have less down time in the workplace. If they are on top of their disease and compliant with their medical treatment plan, they are going to be more productive members of both your staff and of society.
On the medical necessity side, which is the other component of medical management, the advantage for the employer is that anything that is determined not to be medically necessary, and therefore not covered by the health plan, should be seen as a savings.
With all the direct advertising today, people see a new drug and think it will work for them. They see a new service and think it might enhance the quality of their life, and they’re willing to consume the employer’s health insurance dollars to pay for these services.
As a result, there has to be oversight to make sure that services covered by the health plan aren’t being utilized where there’s really no science (medical evidence) behind it that this is going to have a positive effect on the member’s health.
What do employers need to know about precertification?
The main thing about medical necessity is that groups have created lists of services to be precertified. That means the provider has to say, ‘I want to do this, on this date. This is why, and these are the conditions that go into it.’ That system started in the 1970s, and a lot of self-insured plans have maintained lists of procedures to precertify, with little upgrade. This creates an administrative burden, so it’s important not to require it when it is not going to be advantageous to the outcome.
Medical management companies need to look at the return on investment for precertification and, if a procedure is going to be approved every time, there’s not a reason for the call. It places an extra burden on the provider, and creates worry for the member and extra paperwork for the claim paid.
On the other hand, there are procedures that don’t have medical evidence behind them. For a medical management company to review a procedure without medical evidence is just someone’s opinion that it is or is not medically necessary. So it is important when selecting a medical management firm to know what science (medical evidence) it is using to develop and maintain its lists and review of medical necessity.
What would you say to executives who say they don’t have time to deal with this?
They need to rely on someone who does know about it, whether that is a consultant or a credible carrier that incorporates these services. The savings can be from little — just a sentinel effect — to a significant savings because you are reviewing things that may not be medically necessary and only helping those members who really need help through case management. The employer should see a return not only on savings from discouraging medically unnecessary procedures but by helping members be more productive by managing their health conditions.
The employer can approach a decision on medical management either as a way to save money on health insurance, or as wanting to help employees and make resources available to them. When selecting a medical management company, you need to recognize, do you just want to save money, do you want to help the members, or are you looking for a combination of both?
Nancy J. Sublette, R.N., M.H.A., is business change manager, Sr., at HealthLink®. Reach her at (314) 925-6611 or email@example.com.
Many employers continue to pay their health care premiums month after month, without really understanding what they’re getting and how the plan is being used.
If you’re not using claims reporting to understand how your employees are using health care and pinpointing how you can help them use it more wisely, you are leaving dollars on the table, says Mark Haegele, director of sales at HealthLink.
“Many employers that take an approach of active engagement have not had any cost increases for years,” says Haegele. “It’s not unrealistic to have flat costs for several years in a row as a result of the active management of information and reporting.”
Smart Business spoke with Haegele about how health care reporting can save employers money and help employees get more directed care at a more reasonable cost.
What is health reporting?
A true managed care approach helps employers understand their costs, and that is done through reporting.
Your broker should be identifying what your costs are for your health plan and looking at the drivers that are causing year-over-year increases. Using that information, you can apply solutions to help mitigate those costs.
Too many employers simply pay their premiums with no idea what they are getting. They don’t go to that next step and get a full understanding of their costs.
How can employers begin to take that next step?
Take, for example, wellness and biometric screening. Those are important and the employer will pay for employees to get their blood drawn, identify cholesterol numbers, but then that’s it. They don’t close the loop and make sure the member’s primary care doctor gets the information, or that those whose numbers were above normal get a checkup six months later to measure improvement.
Employers are not taking advantage of the information available to them and then asking the right questions. You have to ask: What is driving these costs? And the best way to get the answer is through reporting.
How does the reporting process work?
Cost in a health plan is driven by three components: price, utilization and intensity. Intensity is the one that everyone forgets about. Everyone knows price: You went to the hospital, it cost X dollars per unit. Utilization is the type of services and how often they were used; for example, someone went to the emergency room four times, you had so many hospital admissions per 1,000 members, etc. Intensity is the third, but not often acknowledged, component of health care. For example, did a member get an MRI when he or she could have gotten a less expensive CAT scan, or had carpal tunnel surgery when he or she could have had therapy?
To get started, talk to your broker about this funnel approach. Give him or her 12 months’ worth of claims information. Then the broker can break it down by categories — inpatient dollars, outpatient dollars, physician dollars and ancillary dollars that make that initial number of claims dollars.
Then, because everything is driven by trends, you want to look at three years’ worth of claims information. Start with year one and see how each of those categories has gone up and down. Now you can see how your overall costs increased year after year on a per-member, per-month basis, versus the total.
Next, look at what is increasing. If everything is increasing, you know you have to dig into each category. But if only outpatient costs are increasing and the other three have been level, you now have a direction to focus your energy.
Then, as you dig into that category and claims information, you can pinpoint the thing that is driving those costs and identify where there are either opportunities to get people into a lower-cost setting or avoid waste, fraud and abuse.
Then you can establish, over the next 12 months, and over three years, what you are trying to accomplish with your health plan.
If you are ever going to implement a strategy that is going to end cost trends and improve the health of your members, it all starts with reporting. As with anything, in order to create improvement, you have to understand the metrics, and you have to have a benchmark and a baseline to identify where to improve from.
Otherwise, you’re just going on without any kind of acknowledgement or realization of what you can accomplish.
What would you say to a business leader who seems overwhelmed by this approach?
Go after the low-hanging fruit. There will be certain things that you’ve identified when you look at these numbers that are clearly the worst, so start by going after whatever is the easiest and presents the biggest opportunity for you.
If you’re not doing this, if you’re not dedicating your energy and resources to understanding your benefit plan through reporting, and creating metrics and objectives to control costs; that’s part of the reason your costs are going up. If you dedicate time to this, you will find savings and opportunities that are very significant and that will afford you the ability to control trends.
Don’t worry that you can’t change the overall culture overnight. That’s where your strategy comes in, where you work with your broker or consultant to try to create some improvement.
Employers should expect from their health plans, and from their consultants, that this is being done. As a business leader, you shouldn’t have to dedicate much of your time to making this happen. You’ve hired a health plan, you’ve hired brokers, and you should expect them to bring new solutions to you. And if they’re not, you should be asking for it.
Mark Haegele is director of sales at HealthLink®. Reach him at (314) 925-6310 or firstname.lastname@example.org.
Most consumers don’t think of mental health as separate from physical health; when they don’t feel well, they simply want to take steps to feel better.
Now, due to ongoing legislation and changes in thinking, more providers and employers are beginning to view mental health as being on a continuum of medical care, not as something separate, says Peter Ambrose Jr., Ph.D., M.B.A., regional vice president — Behavioral Health Operations at HealthLink®.
“When the behavioral heath care benefit is integrated with the medical benefit, it benefits the consumer,” says Ambrose. “They are two sides of the same coin, and integrating them allows health care consumers to see the appropriate providers and do everything they can to improve their health both physically and mentally.”
Smart Business spoke with Ambrose about how offering a behavioral health benefit can improve both productivity and your company’s bottom line.
How does a behavioral health component of health care coverage benefit both members and the employer?
For an employer, the advantage to having an integrated benefit is that, if employees don’t receive the appropriate treatment for mental health or substance abuse issues, they are likely to experience higher medical claims, poor productivity, increased absenteeism, short- and long-term disability claims and FMLA claims. All of a sudden, you are facing myriad productivity and financial ramifications due to poor access to specialized providers.
If you own a business in which, for example, you have someone on a ladder every day and that person has a substance abuse issue, and is not getting treated properly because the benefit isn’t good enough, the odds are good that that person is going to fall off the ladder eventually. That is a worksite liability for you as an employer, as well as a health care issue.
What would you say to an employer who says the company can’t afford to cover behavioral health issues?
Practically speaking, you can’t exclude behavioral health conditions, because the cost is going to show up somewhere in the total medical cost of care. Depressed employees will go to a primary care physician and say they are upset, are depressed or are anxious. Even if your plan excludes adequate behavioral health benefits, the employee will be treated for anxiety or depression but may not necessarily be treated correctly.
Mental health patients don’t just go away; they still show up elsewhere in the medical system. If employees have substance abuse problems, they’ll show up in neurology, in primary care or in emergency rooms. The result is that people with specific conditions are being forced to see professionals who are not specialists in the area in which they need help. As an employer, you’re still paying for it, but it’s not being addressed correctly.
Think of depression as an ‘emotional flu.’ If you have diabetes and you have to watch your diet, take insulin and exercise three times a week, but you feel like you have the flu, you’re not going to exercise as much as you should. Depression saps your energy and mitigates thinking patterns, which, as a result, can have an adverse impact on the physical problem.
Mental health represents 3 to 5 percent of premium coverage in terms of cost to the employer. The bang for your buck, however, far exceeds that. Studies show that if someone has a medical condition that costs them $1 over the course of a year, if the exact same person also has bipolar illness, that person will spend $1.25 to $1.30 per year on the exact same illness, excluding psychiatric care costs. The bipolar illness impacts compliance that results in poor health and increased costs.
As an employer, if you don’t help employees take care of behavioral health issues, it’s going to impact everything else that goes on with that person. When the employee really needs it, you’re not giving that person the expertise he or she requires and you’re going to pay dearly covering other issues that result.
How can employers encourage employees to overcome the stigma of behavioral health issues and get the help they need?
Although the stigma is not what it used to be, it still exists. You have to educate people that regardless of their health condition, if they are in pain, it makes sense to treat it and, more important, if you are going to go out of your way to get it treated, go to the right professional to get it treated correctly.
The majority of all antidepressants are prescribed by primary care doctors. A large portion of those are given inappropriately, either for too short a period of time or in too low a dosage. If that’s the case, the patient is taking a drug but not getting the benefit he or she needs. You wouldn’t go to a podiatrist if you have a toothache, so if someone has a mental illness or a substance abuse problem, you want that person to go to a psychiatrist, psychologist, social worker or other mental health professional.
How can an employer get started implementing a plan that integrates behavioral health with medical health?
Oftentimes, employers have concerns but don’t know who to talk to. When it comes to behavioral health, call your account representative and say, ‘I don’t even know the right question to ask, but I want to talk about how to improve our medical benefits.’
Under health care reform, the rules are not clear, and many employers don’t understand what they can and can’t do. They are worried about liability, both financial and legal. And sometimes they suffer from paralysis, either from too much or too little information.
But you have to treat it like any other business decision. Health care costs are eating at the bottom line and you have to address them. You can no longer ignore them because doing so will affect your ability to add employees and diversify your company.
Peter Ambrose Jr., Ph.D., M.B.A, is regional vice president — Behavioral Health Operations at HealthLink. Reach him at (314) 923-8325 or Peter.Ambrose@wellpoint.com.