How can a PHM program help?
Benefit increases for a 200-employee company are driven primarily by that company’s experience or loss ratio. Unfortunately, many companies of this size do not participate in their experience, or are pooled with other companies by the insurance companies, and do not receive any material information about the loss ratio of their plan. As companies begin to break out of these pools and engage in participating funding insurance policies, managing their health care spend will become an ever-increasing priority.
It is estimated that at least one-third of the $1 trillion annual spend on chronic conditions is spent just to treat seven of the most common diseases (cancer, diabetes, hypertension, stroke, heart disease, pulmonary conditions and mental illness). A well-designed PHM program will allow a company to control the amount that is spent to treat employees with chronic diseases.
How much control do businesses really have over rising health care costs?
As insurance premiums continue to rise, the pool of insured companies falls into two unique entities heading in opposite directions: 1) Companies that take an active roll in their employees’ well-being and positioning themselves with insurance companies who reward their better-than-average claims utilizations, and 2) companies who assume that there is nothing to be done about the increasing cost of medical care and take their pooled increases on blind faith. The proactive companies will drive average annual increases in the low single digits, while the others will be taking on higher than ever increases.
Bottom line: Talk with your benefit consultant about how implementing a PHM program could ensure that your company is heading toward fiscal responsibility in your employee benefits offering.
JP Pressley is vice president at USI in Walnut Creek. Reach him at (925) 472-6770 or [email protected].
