Article 3 of 4: Managing School District Consumerism and Wellness
Self-funding is rapidly moving into school districts of all sizes as a major cost-control strategy. And why not? Districts that self-insure can design their own plans and tailor them to meet their employee’s needs, all while eliminating those features with little utilization. All signs indicate that self-funding your plan can yield significant savings for stable groups from 30 employees and up.
As adoption grows, cost-reduction strategies in self-funded environments are evolving as well. In this article series, Jason Rushton will share 4 top ways that your school district can take advantage of the trend.
In a self-funded environment, the benefits of consumerism and wellness plans can be fully realized because of the flexibility in plan design. An overall improvement in employee health can lead to an immediate reduction in claims, which feeds back into the organization’s reserve fund.
The goal of a consumer-driven plan is to help empower employees to make daily healthy choices and improve their decision-making skills when making health care decisions. Traditional Health Insurance plans do little to encourage a consumer-focused approach in health care spending – participants have no incentive for choosing low-cost providers or shopping for the lowest price prescription drug. This lack of consumerism can create runaway claims that drive premium increases.
One plan design that encourages consumerism is a High-Deductible Health Plan combined with a Health Savings Account (HSA) or a Health Reimbursement Arrangement (HRA). Because your employee is motivated to save and accumulate the money in the HSA or HRA, this encourages them to shop around when searching for the best pharmacy price, choosing a low-cost provider, eliminating duplicate tests and considering alternative treatment.
For a plan like this to succeed, employees need to feel empowered, engaged and supported when making these decisions. There is a balance between providing a consumer-directed plan and supporting employees to make these decisions they may not be used to making. The employer’s role in consumerism is to encourage employees to be better consumers by providing employees with the tools, resources and incentives they need to make cost-conscious decisions.
Services such as a medical concierge are cost-efficient ways to help employees be confident in selecting a doctor, communicating with medical providers and managing medications, as well as understanding the importance of preventative exams and assessing treatment options based on cost, risk and benefits.
Implementing a wellness plan within the workplace is becoming very popular, but does it work to lower premiums?
A 2013 RAND study showed that most wellness programs are ineffective and suffer from low participation rates of less than 24%. So if wellness programs are so great, why are so many of them not working? The answer is in the planning, strategy and execution. For example, plans that lack strategic planning and communication, as well as those that lack hard metrics and relevant incentives can be ineffective. On the other hand, well thought-out, strategic programs have been proven to work.
Conducting an employee awareness and education program about depression, anxiety and substance abuse
Educate supervisors to watch for signs of mental illness
Offer mental health screening
Collaborate with local providers and clinics
Because of the flexibility in plan design in a self-funded environment, the savings from both consumerism and wellness plans can be fully realized. Educating employees how to use a health savings plan in combination with a new high deductible plan is a win for both the employee and the employer. And marrying this to a well-designed wellness plan not only optimizes the savings but is also the right thing to do for employees.