BenefitsPro: 3 Must-Have Cost-Saving Services for Employees
Navigating today’s health care system is challenging. Tricky acronyms and technical jargon combined with a seemingly endless array of providers and plan options can be a lot to juggle, with low health care literacy costing Americans more than $230 billion per year due to poor decision-making.
Sadly, a large portion of these costs could have been avoided. When employees don’t understand how their plan options differ and how they work, they tend to make poor choices when electing their benefits — or make no choice at all. Many employees roll over the same plan year after year, or choose a plan based on what a family member or friend might have. By not accounting for their budget, their own health care needs or how those needs might have changed in the last year, employees may miss out on more-appropriate coverage choices and may end up paying more out-of-pocket in premiums and care as a result.
Employees often take a passive approach to choosing providers and where to have certain medical procedures done as well. While it’s easiest to go where your doctor suggests or to choose a provider based on office location, this approach tends to drive up costs – for both employees and their employers. With employers projected to pay upwards of $14,000 per employee on a company-sponsored health plan, it falls to HR departments to ensure those dollars are being put to good use.
To help keep employee out-of-pocket spending low and reduce company health care expenditures, employers need to provide their people with the tools and resources needed to make informed, cost-effective health care decisions. To improve employees’ health care literacy, benefits understanding and benefits utilization, an investment in one-on-one engagement, health care transparency and advocacy services can go a long way towards educating employees on the valuable programs their company offers and making sure they’re getting the most from their coverage.
Many employees choose to stay in the same health plan year after year, even if their health care needs have changed. That’s because many – more than two-thirds of all employees, according to Alfac’s 2017 Workforces report – find benefits-related reading and research to be complicated, time-consuming or stressful. With employees’ opting to skip any research into selecting the right coverage for them, employers need to clearly demonstrate the value of investing time in making such an important decision.
Strategic engagement services can help employees understand, select and use health care benefits offered by their employer. With these services, benefits educators sit down with employees (and often their family members) one-on-one during enrollment season to explain benefits options and provide personalized recommendations about what may work best for them. This individualized approach is also effective during the new hire onboarding process, ensuring new employees understand the benefits their new employer will offer.
Engagement doesn’t stop with enrollment, however. To keep employees thinking about how best – and when – to use their plans, employers should be communicating year-round. Newsletters, summary plan descriptions (SPDs) and summaries of benefits and coverage (SBCs), emails, posters, webinars, townhall meetings, tweets and videos all ensure that employees will have access to information they need to make smarter health care decisions.
How to roll it out: Before rolling out an employee engagement service, HR departments should ensure they have a good sense of the demographics of their population. This information will be crucial in determining how to arrange the one-on-one benefits meetings and maintain ongoing communication with employees.
For instance, a company could have the majority of its workforce based out of a single office, with remote workers scattered across the country. To ensure all employees have access to benefits educators, HR should consider coordinating on-site meetings with benefits educators for employees who work at the corporate headquarters, while also scheduling one-on-one Skype sessions or phone calls so remote workers can do the same. Likewise, identifying generational subgroups could modify how HR approaches benefits communication, both in terms of content and communication channel. There is no one-size-fits-all approach to employee engagement, so taking the time to strategize and plan it out is invaluable.
Passive decision-making can also make an appearance when individuals attempt to locate and receive health care services. Most people don’t realize that the same medical treatments can vary greatly between providers, even within the same geographic area and within the same network. A recent report out of Minnesota, for example, showed a price range for a total knee replacement of $6,200 to upwards of $47,000 in the same area.
Even if they are aware that costs can vary, most employees just aren’t used to shopping for health care like they do for other products and services. A study from Mad*Pow found that more than one third (37.3 percent) of patients don’t do any research on potential costs before an office visit. When people are able to compare prices, research shows that they’re able to choose a less expensive source of care. Employers who offer transparency services empower their employees to do just that, most often through cost comparison reports.
Transparency services generate an estimate of what a person can expect to pay for a specific procedure or treatment by aggregating medical billing data within a specific geographic area. The reports they produce are tailored to the user’s insurance plan and clearly show the difference in prices between in- and out-of-network providers. Some will also include the cost for common related treatments (e.g., the cost of a colonoscopy plus the cost of anesthesia), which will create a more comprehensive view of what a person will likely pay. When employees are armed with this information beforehand, they’re better able to keep out-of-pocket costs at a minimum (for themselves and their employers).
How to roll it out: Transparency and cost comparison tools alone will not help employees become smarter health care shoppers. To complement self-service cost comparison tools, many transparency services offer health care advocates who can generate specific procedural cost reports based upon an employee’s location, physician, facility and pharmacy preference. Better still, some transparency services offer employees monetary incentives for selecting the lowest cost provider.
If possible, include actual employee testimonials (even if names are changed) to help employees envision the potential effect on their own wallets. Once employees start to see the concrete ways that comparison shopping for health care will benefit them, then it will become more of a habit.
Even the most educated health care consumers can end up paying more than they need to — a group of auditors hired by insurance companies found errors in more than 90 percent of the hospital bills they examined. Despite a push toward consumer-driven health care, few employees have the time or knowledge to decipher the complex billing and coding systems used by health care professionals today. Advocacy services break down and analyze each cost woven into a medical bill to ensure there are no unnecessary or overpriced charges — saving the employee, employer and even the insurer money.
Where transparency services provide key information before an employee receives care, advocacy services can help identify and resolve issues after treatment is received. Health care advocates work with and on behalf of employees to review claims, handle disputes with providers and insurers, and research different treatment options, procedures, doctors and hospitals. They can also help individuals make appointments, answer questions about a doctor or pharmacist’s instructions, arrange transportation and coordinate care across different providers. Think of it as employers’ “white glove service” for ensuring all employee health care needs are met.
How to roll it out: Just as they’d expect employees to be thoughtful in shopping around for providers, HR departments should be just as thorough in evaluating qualified patient advocates to enlist for their organization. Because these individuals will work directly with employees on their personal health care needs, employers should look for advocates that display a high standard of professionalism, have great verbal and non-verbal communication skills and showcase the sensitivity necessary to manage personal matters. Advocates also need to demonstrate superior knowledge of medical terms and the health care system, especially when it comes to how health care is financed.
Although the rising cost of health care may be outside employers’ control, educating employees about their benefits isn’t. Smarter, more price-savvy employees will be happier employees in the long run, and lower health care costs at the individual and employer level will be celebrated. When knowledge is the best defense against overspending on health care, HR departments can put their faith in engagement, transparency and advocacy services to provide it.
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(Kim Buckey is vice president of client services at DirectPath.)