The self-insured or self-funded healthcare market is only growing. In 2019, 94 million of the nation’s 156 million employed citizens were covered by these plans, saving between 20% to 30% of the costs associated with traditional coverage plans. According to the National Business Group’s 2019 Health Care Strategy and Plan Design Survey, employers currently spend over $14,000 per employee per year on healthcare, with those costs expected to increase by roughly 4% over the next year, according to Mercer’s National Survey of Employer-Sponsored Health Plans.
Companies who choose to engage in a self-funded strategy are assuming the risk of their population by providing medical and pharmacy costs for their employees. As healthcare costs change, these companies assume the burden or benefit in the future.
So, how can self-funded employers keep their costs down while also making sure that quality healthcare is provided to their beneficiaries and keep their population engaged?
Lightbeam observes several successful focal points:
- Robust reporting analytics
- Tactical patient engagement tailored with incentives
- Preferred network creation
Analytics can assist self-funded employers in many ways. One of the first is through intensive plan design. By understanding where an organization’s current and predicted spend is, self-insured employers can more accurately forecast and project future healthcare costs. Employers can also use analytics tools to understand how their beneficiaries’ cost and utilization are spread within their population to best design a high-quality, low-cost preferred network. For example, analytics can be used to identify frequent types of surgeries occurring within the employee population, and, more specifically, if there is any variation in prices for certain surgical services. These costs can fluctuate dramatically across providers, and the quality and outcomes can also vary. Another example includes monitoring ER utilization and considering the organization’s benefit design.
These types of analytics can help build a preferred network or plan design based on cost and quality. Employers can then implement plan-based incentives to drive employees toward specific services.
Engaging members of self-insured networks is fundamental to promote involvement in treatment and cut unnecessary expenditures. Interactive patient portals are one of the means to communicate and engage with patients. Messaging, live chatting with care managers, viewing payment histories, and providing various resources in a single place simplifies the care process substantially. Mobile applications are especially helpful for technologically-savvier patients. Missed appointments and missed care plan steps can lead to additional expenses. In a world that relies on technology more than ever, a text or an email to confirm dates or send other notifications not only helps with cost management but also long-term outcomes.
In a 2019 article for Population Health Management, doctors Steven E. Goldberg, MD, MBA, Maren S. Fragala, Ph.D., and Jay G. Wohlgemuth, MD profiled Quest Diagnostics’ journey as a self-insured employer. Their goals were centered on the Triple Aim and promoting broad access to quality care for their staff. With the money saved, Quest intended to refunnel those costs to their employees to engage them further and continue to positively impact their health. During the enrollment period, they hosted lunch and learns, upped the visibility in their feedback portal, and sent surveys focused on their satisfaction with the program and directly engaged approximately 3,000 employees.
Create a High-Quality, Low-Cost Preferred Network
Quest Diagnostics saw success in the approach of applying the Triple Aim as a strategy to manage their beneficiaries collaboratively with a national health plan to achieve yearly reductions in cost while improving quality outcomes. A best practice from Lightbeam and used by other recognized firms is the encouragement of narrow, preferred networks for their beneficiaries. Their care was not limited; ultimately, they could see any physician of their choosing. But, employees were incentivized to use in-network care and instituted controls on reimbursement for out-of-network physicians. Quest also implemented the use of “centers of excellence,” which ensured their staff received high-quality services that reduced waste.
Preferred provider networks can lessen the likelihood of leakage and unnecessary expense because of the coordination in information-sharing from provider to specialist, the attention to detail when it comes to coding, follow-ups, and other care management steps. They also can forge meaningful provider-patient relationships.
Check Out the Lightbeam Education Center
For more resources to put comprehensive value-based care into practice while staying mindful of costs, visit the Lightbeam Education Center for industry articles, webinars, case studies, and more.
James Juelg is an Account Manager at Lightbeam.