MedCity Influencers

Self-funded employers need to educate employees to help them make smarter insurance decisions

For employees to take advantage of the high deductible health plan, employers must engage and educate them on the basics of what they are buying.

 

affordable health insurance

Smart and thoughtful people have occupied positions of power, both in the public and private sectors, for a very long time, and if there were truly easy answers to be implemented, they probably would have already been implemented.

So yes, it would be nice if America’s healthcare cost problem could be simply solved. But no, don’t expect it to happen with a single, tidy solution.

The current en vogue single, tidy solution is the high deductible health plan (HDHP). The thinking goes that giving employees the financial incentive in the form of increased cost-sharing to “shop” will lead to smarter (i.e., lower) healthcare spending. Sixteen percent of covered employees had a deductible of $1,000 or more in 2006. That percentage jumped all the way to 63% by 2015.

And, in fact, HDHPs do cut costs, but usually because patients cut back on all care, not because of increased consumerism – at least not yet.

Kim Buckey, vice president of Client Services at DirectPath, works in health insurance benefits and thinks a lot about this problem and potential solutions. She disagreed with the notion that employers have when they think, “because we are putting in this plan you [employees] will become a consumer.

Buckey believes that “Unless we explain how to do that, people aren’t going to get there.”

You can’t really be a good consumer if you don’t even understand the basics of deductibles, co-insurance, co-pays and insurance networks, and the overwhelming majority of people don’t understand these basic elements of health insurance.

There are also plenty of opportunities to inform regarding the ever-changing components and costs of health insurance. Instead of potentially offering higher salaries, employers are instead paying ever increasing amounts, now averaging almost $13,000 for family coverage, toward employee’s health insurance. Ms. Buckey believes informing employees about this landscape could be a useful part of the education process.

“If employees understand why a change is being made, they are more likely to be neutral, if not outright accepting of a change,” she said. “What is a company’s benefit strategy? What are they trying to accomplish? Maybe even address what employers in general are doing.”

Howard Danzig works with small employers as CEO of Employers Committed to Control Health Insurance Costs. He says part of the issue is often that companies have little understanding about where premium dollars are going.

“What needs to happen is more employers and their employees need to begin to control costs by first knowing what those costs are. It does take an understanding of the system and a desire to ask for and get itemized accounting of the costs of products and services,” Danzing said.

Large employers have an advantage in this process by being self-funded – the employer, not the insurance company, pays the insurance claims. This means the employer is able to directly see how costs are evolving and adjust employee coverage and premium contributions accordingly.

Without significant proactivity, the same is not true for small employers.

“What I think is most disturbing to employees is that it all just seems so random. Prices on their maintenance drugs go up, and why? Well, it’s a mystery with traditional plans,”  Danzig said.

This helps explain why more employers are moving away from group insurance and exploring the self-funded option. Thirty-nine percent of private employers now offer at least one self-funded plan, up from 28.5% in 1996.

Beyond all these opportunities to educate and adapt, there are an increasing number of tools, from pricing transparency to prescription management, helping patients better utilize healthcare. Employers must be intelligent about where to allocate budget.

“You don’t necessarily need to engage everyone. Probably about 75% of your population is pretty healthy,” said Rebecca Palm, co-founder of Copatient, a company that helps with billing errors.

The focus for now, Palm says, should be on the other 25%.

“It’s really important to figure out what their stress points are, and then find solutions that they can very easily access to address those points because that’s when you are going to get the good engagement,” Palm said.

Perhaps most important, though, is mere patience. Patience is rarely pleasant, especially when there is such a large problem causing harm today, but it is usually prudent. We are in the middle of a massive change in the way we view and interact with healthcare. Billions of dollars are being poured into healthcare startups each year. Companies are finding creative ways to incentivize employees to choose high-quality, low-cost treatments. Pricing transparency is starting to become a very real thing. States have found innovative ways to bring down costs. And through HDHPs, combined with any number of navigation tools, consumerism can become more the norm.

No single solution offers the entire solution. That’s okay. Smart and thoughtful people will strive to collect tiny victories where they can, and together these victories will help transform our healthcare system into something better. That is, after all, the most plausible way forward when easy answers are elusive.

Photo Credit:  Flickr user 401 (K) 2012


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Adam Schaefer

Adam Schaefer is a co-founder of Tartan, a service that simplifies voluntary benefit premium payments . He is also a graduate of the Medill School of Journalism at Northwestern University.

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