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Group benefits strategies: Managing health care costs

By Higginbotham on April 13 , 2017

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Imagine that Gas Station A charges $2.50 a gallon. Gas Station B down the road charges three times as much at $7.50 a gallon. Where would you fill up the company car? At Gas Station A of course! 

Believe it or not, this scenario plays out every day in our health care system, with a much different outcome. According to a Blue Cross Blue Shield report, the cost of a total knee replacement in Dallas can range from $16,722 to $61,585 depending on the hospital. That’s a 267 percent difference!

If your employee happens to choose the most expensive $61,585 knee replacement option, it could make a big difference in your group health plan’s loss experience… and in the price increase you will pay the following year.

Why would people choose to pay excessively high prices for health care services? One reason: They don’t know the difference.

We all routinely compare prices for gas, groceries and contractors’ services. However, for some reason, we rarely inquire about the cost of medical procedures. We simply go with whatever our doctors recommend.

It’s a new day in health care and it’s time to take control.

As an employer, it’s easy to feel like you’re hamstrung when it comes to the cost of health insurance. It probably seems like no matter what you do, you’ll be paying a 10 to 20 percent increase year-after-year. However, there are some ways to start managing health care costs. Below are five suggestions.

  1. Educate your team. Many employees don’t understand that their health care decisions directly impact your company’s group health insurance premiums, and ultimately, the amount they will have to pay for their portion of costs next year. Invite your team to a pizza lunch (or perhaps a series of lunches) and explain how the process works. Encourage them to compare pricing for planned medical procedures and to make smarter decisions. You may even want to invite some local guest speakers. Ask your health insurance broker to help you plan a fun event.
  1. Provide resources to help employees make better health care decisions. For example, Healthcare Bluebook and Clear Health Costs are both helpful medical price comparison sites. Your resource sheet should also include some helpful reminders such as when an urgent care clinic may be more appropriate than the emergency room, along with a list of in-network urgent care clinics in your area. If there are pharmaceutical discounts available through your plan, share the details. Make sure your team understands in-network vs. out-of-network cost differences and key details to help optimize their health benefits.
  1. Challenge your HR team to spearhead the smart health care initiative. Sure, employees can go online and do the research themselves, but very few will take the time. To change behavior, personal communication is essential and it must be ongoing. Encourage your HR team to proactively communicate smart health care usage strategies with your team on a quarterly basis at a minimum. You may event want to email out a weekly Health Care Tip of the Week to keep the topic at the forefront.
  1. Establish a wellness expectation. Create a healthy workplace culture. Host onsite flu shots for employees and their families. Structure your group health plan to incentivize employees for completing annual wellness exams and screenings. Host a noon-time walking club or an after-work yoga class at your facility.
  1. Get creative with your health care plan’s structure. As your team becomes increasingly mindful of wellness and health care spending, it may seem less risky to consider a high-deductible program or a loss-sensitive plan, such as a captive, partially-self-insured or self-insured program. Interestingly, 57 percent of U.S. health plans are now self-insured according to Employee Benefit Adviser, citing a Kaiser Family Foundation report. In the past, many employers in the 100 to 250 employee size range considered self-funding to be risky. Now, they’re finding it’s a viable way to take control during the turbulent environment of health reform.
    Related: A trend on the rise: Self-funded health insurance

The ball is in your court.

Don’t make the mistake of thinking there’s nothing you can do about the high cost of health care. Start taking control of your team’s health care experience. You might be surprised at the impact you can make. Need help? Reach out to our employee benefits team.

 

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