What companies can do to help manage their health care costs
Gracelyn McDermott, an executive director with Kaiser Permanente, works with a lot of employers looking to control the cost of health care and health care insurance. She’s racked up a few success stories — like the company that was able to cut the increases in its health care premiums to single digits year over year.
That company’s secret sauce was a combination of two factors. One, the company moved to a consumer-driven health plan, which shifts more costs to employees. Then, the employer designed a series of monthly programs to educate its employees on various topics related to overall health and well-being.
“It’s more than just keeping people out of the hospital,” McDermott explained. “It’s that total health of mind, body and spirit. The company knew, in doing that, it was going to create an engaged and productive workforce.”
Health care costs have been on the rise for years, and that’s not expected to change. The cost of employer health coverage is expected to rise 5 percent in 2019, according to the annual health care survey by the National Business Group on Health. That will mark the sixth year in a row health care coverage costs have jumped by at least 5 percent.
To control those costs, many companies have been pushing their employees toward consumer-driven health plans — also known as high-deductible plans — which transfer more health care costs to employees and also offers lower health insurance premiums. In 2018, 53 percent of employers reported that their high-deductible offerings had the highest enrollment, according to the survey.
McDermott said that alone isn’t enough to control health care costs. While high-deductible plans shift more costs to employees, they also give employees more responsibility over managing their own care — which doesn’t always lead to the healthiest behavior. “As employees are asked to share more of the cost, some will choose to delay annual checkups, preventive screenings and procedures. In some cases, those delays could lead to more expensive medical costs later,” McDermott said.
In her work at Kaiser Permanente, a national health care provider and not-for-profit health plan, McDermott advises companies to include a heavy dose of education as part of any strategy to cut health care costs. “First and foremost is making sure that employees understand how their health plans work and, particularly if they’re taking on more of a share of the costs, the level of responsibility that they have,” McDermott said.
Then, it’s about instituting programs that promote healthy behaviors across the board, she said. “We like to foster a culture of health throughout an organization, so we make sure that the employers really are brought into establishing that culture. Then, based on that, we design wellness programs around the specific needs of their employees,” McDermott said.
For instance, if a given organization shows a high prevalence of diabetes among its employees, then the company can begin designing a program focused on helping those employees adhere to their medications and encouraging healthier eating habits, McDermott said.
The push for wellness also gets to the heart of another key issue for employers these days: the need to attract and retain employees. That’s why she advises employers against actions like cutting benefits for spouses or dependents as part of a cost-cutting strategy — in part because the “law of numbers” means the more people on your plan, the more you can spread the risk and actually lower your costs. But it’s also about creating a work environment that draws people in.
The same case can be made when it comes to offering health care to part-time employees, McDermott said. “Companies are definitely seeing that as an opportunity to attract good talent,” McDermott said.
That’s why the process of controlling health care costs isn’t as simple as shifting costs, McDermott said. It’s part of a bigger trend toward creating an attractive workplace culture that inspires higher employee engagement and productivity.
“I’m talking to a lot of savvy employers, and they’re getting it,” McDermott said. “The conversation isn’t about cost savings as much as it is impact to business productivity, and a shift from health care strategy to workforce strategy.”
Get started creating a culture of health and wellbeing. Learn how to talk with your employees and gain buy-in for workforce health efforts. Kaiser Permanente is there to support you on your health and well-being journey. https://business.kaiserpermanente.org/.
Kaiser Permanente is the nation’s leading not-for-profit health plan, serving more than 12 million members.
Original Source: Washington Business Journal