When you decide to purchase a new car, most people don’t go to the dealership, randomly point to a car in the lot and say ‘I’ll take that one’. Usually, there is a bit of research involved with regards to cost, features, safety ratings, a trusted friend’s advice, etc. Once your research is complete, you decide which car best meets your needs.
Americans tend to be savvy consumers of most products and services… except when it comes to medical services. Traditional health insurance plans do little to encourage a consumer-focused approach in healthcare spending – participants have no incentive for choosing low-cost providers or shopping for the lowest price prescription drug. Employees either don’t know the cost of the care they receive or many have never given cost much thought since their health insurance was paying for it.
This lack of consumerism can create runaway claims that drive premium increases. Experts agree that to reduce costs, organizations must encourage prudent medical spending. According to the Towers Watson 2015 Emerging Trends in Health Care Survey, 66% of employers rated developing or enhancing a workplace culture where employees are responsible for health as their top focus for 2016.
Medical consumerism is a huge shift in mindset for most employees. With support from the school, city or county, insurance carrier and consultant, these employees can confidently make daily healthy choices and improve their healthcare decision-making skills when provided with the proper tools/resources, plan designs and education.
Increasing your deductible doesn’t mean leaving employees out in the cold
One tried and true strategy that encourages smarter healthcare spending is to raise the deductible, but provide the deductible amount in a Health Reimbursement Arrangement (HRA). Some schools, cities and counties think raising the deductible means they have to go all the way to a IRS-defined, HSA-qualified High Deductible Health Plan. Nothing could be further than from the truth when you use an HRA instead of an HSA. Easing into this type of plan is usually best. That way, instead of resisting the idea out of hand, employees get used to the idea of using a medical savings account.
So start small. If your deductible is normally $500, increase it to $750 and provide them with a $250 HRA. Because funds in the funded HRA roll over year-to-year, employees will be motivated to spend as little of it as possible. You may just see school, city and county employees shopping around by searching for the best pharmacy price, choosing urgent care instead of the emergency room, eliminating duplicate tests or considering alternative treatment.
Providing tools and resources
Education is key to encourage employees to become a better medical consumer. There are a variety of tools/resources out there designed to educate, inform and support consumers as they learn how to engage differently with the healthcare system. Schools, cities and counties may offer resources to employees on their own or team up with their health insurance carrier or consultant.
There are simple things the school, city and county can do to provide support and education. Start with the basics. Do your employees know the definitions of common insurance terms like co-pay and deductible? Do they know what in-network vs. out of network means and the costs associated with each? Do they understand how their plan works? If they have an HRA, do they know how to use it and what the funds can be used for? Do they know the appropriate place to get appropriate care (urgent care vs. emergency room)? Does your carrier have a prescription service where employees can get a three month supply of their medication for a low fixed price? Are there any other services your insurance company offers that would benefit your employees in either savings or education?
Information can be communicated to school, city and county employees in a variety of ways including payroll stuffers, enrollment meetings, posters, videos, e-newsletters, benefits fair, etc. Your health insurance consultant is a great resource for these types of materials and events.
Education based upon utilization
Ask your consultant about your utilization reports. These reports can give you an aggregate view of your employees’ health including inpatient and outpatient claims, emergency room and office visit utilization and cost and more. You may learn that many of your employees visit the ER but never use urgent care, are smokers, suffer from high blood pressure, etc.
This information can help you decide what sort education avenues your employees may benefit from including:
A supportive workplace will encourage employee engagement which will make them better consumers for their own health in eliminating risky behaviors, embracing a healthier lifestyle and decreasing claims cost.