It's halftime.

No, it's not football season yet, but not a single team is sitting on the sidelines just waiting for the first coin toss. They're practicing, planning, and preparing to win in the coming year. The health benefits game is no different: We're halfway through the year, and it's time to gear up for the next season – the upcoming renewal cycle.

Say goodbye to the annual "set it and forget it" mentality of chucking the freshly signed
plan renewal in a drawer to focus on other things until next year. Winning the health
benefits game requires training all year round.

The time is now to start constructing a self-funded plan to win big next year.

Stop running a health plan that is constantly running defense – it's time to get the offense out on the field. Tuck your claims data in the crook of your arm and charge toward the goal line.

The company budget's second or third costliest line item is an employer's health plan. So, when the health benefits begin to hoard company funds, other growth-promoting investment areas like travel, innovation, and compensation take a hit. Soon, there's a spending freeze – you're running the ball in the wrong direction. Don't focus on pinching pennies when a pile of dollars is unnecessarily flying out the door.

There is a better way.

Build a health plan strategy that grabs hold of the ball and then bobs and weaves with gazelle-like agility around the traditional obstacles that used to make you feel powerless. Sometimes a single change will score the touchdown that saves hundreds of thousands of dollars in the blink of an eye. Other plays get you a few yards at a time supplying you with incremental, progressive savings that compound over time.

Either way, in big and small chunks, you make it to the end zone where members are cheering in the stands because they now have the highest quality of care at the lowest possible price. Even better, they show up for work happier, healthier, more motivated, more loyal, and more focused than ever before.

As we prep for the big win, we’ll cover:

• Structuring the winning plan. Recruiting a team of MVPs who will coach you down the field and execute the plays is essential to your victory.

• Harnessing your data. Your data defines your opponent and loads your playbook with the strategies to play them with excellence and efficiency.

• Taking action. Never take your eye off the ball. A successful game requires continuous oversight. You will need to consistently review your historical and predictive data so you can pivot when necessary to maximize savings and ensure quality healthcare.

As the legendary coach for the Green Bay Packers, Vince Lombardi, once said, "The price of success is hard work, dedication to the job at hand, and the determination that whether we win or lose, we have applied the best of ourselves to the task at hand."

Now, if you're fully insured, let's be honest, you've forfeited the game. You handed over the win to the carrier.

Transitioning to a self-funded plan will take work and dedication, but there's no need to reinvent the wheel. So many have blazed the trail that proven, streamlined strategies and partners are ready and waiting for you to hike the ball to them. They will help you structure your plan, access and analyze your data, and implement your offensive strategy.

Structuring the Winning Plan: Recruit Your Team

Structuring your plan with the right people, the right tools, and the right incentives is key to present and future flexibility. When costs are up, utilization is down. When utilization is down, member health and productivity decline. Building a team of partners with the skills to achieve higher quality care at a lower cost increases utilization, improves worker performance, and boosts the company's bottom line.

The Coach, a.k.a. The Advisor

Change is inevitable.

The current healthcare system in the U.S. is a shutout for employers and members. In2022, employer-sponsored health plans experienced the highest annual increase in cost per employee since 2010.1 

Only the carriers and their shareholders are winning.

Still, despite the annual spanking fully insured plans take at renewal time, far too many employers are intimidated by the transition to a self-funded plan. Meanwhile, financially crippling out-of-pocket costs are sacking employee retention and new talent recruitment. Many employers have already taken action to stay competitive: 61% of U.S. companies offer self-funded health insurance to their employees.3 

Firms that refuse to catch the wave with the highest quality of care at the lowest possible price will be left holding the ball.

The advisor is the coach who partners with the employer to plan and execute strategies uniquely serving the employer's member pool.

There's no one-size-fits-all plan anymore. Structuring a customized plan based on population-specific data reduces waste.

When it comes to choosing your coach, compensation transparency is essential.

Ask yourself:

• If an advisor is compensated by the carrier, where's the motivation for the advisor to save the employer money and improve benefits?

• When the advisors' commission is a percentage of the renewal, and their annual bonuses depend on client retention, where does their loyalty lie?

Their focus is retaining each client for as long as possible–until the employer realizes there's a better way.

Compensation transparency is so crucial to a winning formula that the Consolidated Appropriations Act (CAA) of 2021 requires carriers to disclose:10

• The amount of compensation paid to the advisor.

• An easily understandable description of the services the advisor provided in exchange for the payment.

• Any other earnings the advisor collected from the carrier, including bonuses or other incentives.

This legislation empowers employers to hire the right advisor with the right incentives.

The Quarterback, a.k.a. The Third-Party Administrator and Pharmacy Benefit Manager

Employers' most significant hurdle is "Who'll ensure employees won’t ‘rush the field’?"

The status quo may feel easy and comfortable, but just because you shove the “easy button” into the drawer doesn't mean chaos will break out.

The third-party administrator (TPA) and pharmacy benefits manager (PBM) serve as the hub for all the partnerships, services, and tools deployed on the mission to save money while providing the highest quality medical and prescription drug service.

TPAs partner with advisors and employers to strategically execute the plays, including:

• Establishing direct primary care2,4,7

• Claims processing

• Enrollment

• Eligibility verification

• Direct contracting4

• Bundling services for episodic care, like knee replacement surgery5

• Customer service

• Other administrative tasks

To secure the home-field advantage, the TPA's client needs to be the employer, not a carrier. To achieve big wins, the TPA must root for the client, not the carrier.

Meanwhile, the PBM handles all things prescription drug benefits. They process prescription drug claims, negotiate discounts with drug manufacturers and pharmacies and oversee drug utilization to verify that medications are used as directed.  

Additionally, the PBM can facilitate the following:

• Mail-order pharmacy services

• Manufacturer assistance programs

• International pharmacy opportunities

• Specialty pharmacy savings

Central to effective PBM services are employer-controlled formularies and pass-through rebates.

Whoever controls the formulary and enjoys the pharmaceutical manufacturer rebates wins financially every time.

The team is taking shape.  

In addition to broker compensation transparency, the CAA shines a floodlight on employers' fiduciary responsibility to avoid fumbling the distribution of the employee's healthcare premiums. Health benefit dollars need to be spent in the employee's best interest. So, like the advisor, the TPA and PBM need to operate on administrative fees only.

As opposed to commission-based compensation, a flat fee aligns with the mission's goal: to win big by providing the employee with the highest quality of care for the lowest possible cost. 

As the Owner (employer), Coach (advisor), and Quarterback (TPA and PBM) sync up to construct a high-value plan, it's crucial to ensure there's no unsportsmanlike conduct anywhere in the system.

The defensive line, the claims integrity experts, protect every premium dollar spent on employee healthcare. Because every winning team knows that while the offense wins games, good defense wins championships. 

The Defensive Line, a.k.a. Claims Integrity

The defensive line is critical because fraud, waste, and abuse in medical and pharmacy claims are a major divert in the field that can trip up even the best-designed health plans. Claims integrity companies analyze the claims data to detect irregularities and suspicious activity patterns.

They can identify and prevent unintentional errors and fraudulent billing practices for services that are not medically necessary, erroneously coded, or never actually occurred. These errors are commonly missed. Claims integrity partners provide significant cost savings and receive a percentage of the savings they provide the employer. 

Harnessing Your Data: Study Your Opponent

Without the data, you've got nothing.

How do you know which play to run? What's the plan? What kind of team prepares for the new season without studying and analyzing its opponent? The unsuccessful kind.

In the health benefits space, your opponents have inflated costs and unnecessary claims.  

Without the data, there’s no strategy. Without a strategy, there’s no win. 

Debbie Ashford, the North America chief actuary for health solutions at Aon, reminds us, "It is not uncommon to see one percent of membership driving 40 percent of health care spend in any given year." 

The data identifies those high-cost members to inspire targeted interventions at the lowest cost.8

Furthermore, the claims data promotes an immediate impact on savings as it allows the team to:

• Analyze utilization patterns to reduce waste4

• Evaluate program performance

• Dig deep into prescription drug patterns to negotiate better discounts or incent more generics

• Prepare for contract negotiations with providers and facilities for greater savings

Who is using the benefits? For what?

When do they need services the most, and where do they go most often?

Are the programs in place producing the intended outcomes?

The answers to these questions lie in the data. That data can direct the course for implementing new services, incentives, education, and contracting, like:

• 24-hour provider line

• Patient Advocacy

• Incentives to use urgent care vs. costly ER visits

• Educate providers on cost differences between similar, commonly prescribed drugs

• Direct contracting with providers the members frequently visit

Big wins arise when the data is put to work to reveal the best next step, and the team takes action. 

In addition to historical claims data, predictive modeling helps the team decide on future plan features. At the same time, employee surveys and studies into members' social determinants of health can further guide and direct the plan's next steps.

For example, if members struggle to get time off to see their doctors, then the employer can do what Rosen Hotels and Resorts in Orlando, Florida, has done for years: keep the employees on the clock while they get their healthcare.

If enough employees lack the necessary transportation to access their healthcare, consider amping up telehealth or investing in an on-site or near-site clinic

Taking Action: Draft Your Team, Review the Stats, Drive the Ball

Nothing happens until you start to move the ball. 

Here's the step-by-step plan:

• Adopt a mentality that this is a long-haul game, and you're in it to win it.

• Structure your team with the right people with the right incentives.

• Get your data, huddle the team, and start running routes to savings.

• Incentivize the behaviors you want to encourage and disincentivize the ones you don't.5
  

Along the way, it's important to prioritize communication and education so everyone involved knows why this change is here and what's in it for them. Employees need to understand how to easily access the system and put it to use for their unique needs.4  

If employees want zero out-of-pocket expenses, then use a zero co-pay or financial reimbursement to incentivize them to receive care only from high-value care providers and facilities.

Encourage consumerism by helping them shop for the highest quality doctor for the best price on an upcoming procedure, even if they have to drive a few extra miles for the savings. Lastly, discourage low-value care with higher member out-of-pocket costs. 

This Is Your Super Bowl

Are you going to be competitive in 2024?

Success requires a well-structured plan, the right team, and the right incentives.

The health benefits game is win or lose. When the employee wins, the employer and the advisor win, too. However, far too many employees are losing because their employers aren't willing to compete or have forfeited out of fear of stepping away from the broken, financially crushing status quo.  

• The term "perk-cession" has hit the airwaves as employee benefits slowly dwindle nationwide while employers struggle to compete for and retain the best talent available.7

• Two-thirds of workers are worried about affording their healthcare since 2023 premium increases are twice what they were in 2022 due to utilization trends.6,7

• The average family premium has increased by 55% since 2010.3

Oddly enough, recent research by Arizent reveals a disconnect between employer and employee perceptions of the affordability of employer-sponsored health benefits. They found that while 80% of employers believe their health plan to be affordable, 66% of employees feel their healthcare costs are too expensive.9 

Who's right? 

The truth is the cost per employee for health benefits increased to $13,800 per employee in 2023, and four-person families with a combined income of $60,000 spend nearly 75% of their discretionary income on healthcare expenses. Perhaps you agree that the employee isn't crying wolf – they're crying Uncle.8,9

It's halftime.

You're halfway through the year; now is the time to start planning for big wins next year. It's time to get your head in the game, assemble your team, get your data, and drive your health benefits across the goal line.  

The journey will come with some huge, immediate savings and progressive savings that will dramatically impact the bottom line more and more over time.

The trick is to follow the data.4 

The "set it and forget it" mentality is a defensive position -- it's not the path forward. It's time you activate an offensive strategy with big wins on the way to the end zone. The right team is wide open and ready to run. Inaction is not an option: It's fourth down with twenty seconds left in the game…are you gonna go for it?

Resources:

• 1 Holdsworth, Z. (2022, November 11). 3 Strategies To Help Companies Reduce Healthcare Costs And Better Manage Benefits. Forbes. https://www.forbes.com/sites/forbesbusinesscouncil/2022/11/11/3-strategies-to-help-companies-reduce-healthcare-costs-and-better-manage-benefits/?sh=54229393c27

• 2Health Payer Intelligence. (2021, September 28). 4 Employer Health Benefit Strategies That Lower Healthcare Costs. https://healthpayerintelligence.com/news/4-employer-health-benefit-strategies-that-lower-healthcare-costs

• 32020 Employer Health Benefits Survey - Section 1: Cost of Health Insurance. (2021, March 17). KFF.  https://www.kff.org/report-section/ehbs-2020-section-1-cost-of-health-insurance/

• 4Japinga, M., McClellan, M., Saunders, R., Zhu, M., Mendelson, D., Thurston, B., Alley, D., & Duke Margolis Center for Health Policy. (2021). A Pathway for Coordinated, Affordable Employer-Sponsored Health Care. https://healthpolicy.duke.edu/sites/default/files/2021-09/Pathway%20for%20Coordinated%2C%20Affordable%20Employer-Sponsored%20Health%20Care..pdf.

• 5Ario, J., Finkelstein, A., & DiBello, J. (2021). The Episode-based Benefit Plan Promoting Episode-based Provider Payment Through Employee Health Benefit Design. https://www.manatt.com/Manatt/media/Documents/Articles/Signify-Episode-of-Care-Plan-Benefit-Design-September-2021_b.pdf

• 6Most workers want employers to help them prepare for health care costs | BenefitsPRO. (2023, April 4). BenefitsPRO. https://www.benefitspro.com/2023/04/03/most-workers-want-employers-to-help-them-prepare-for-health-care-costs/

• 7 The future of employer-sponsored health care: strategic responses and cost containment opportunities | BenefitsPRO. https://www.benefitspro.com/2023/04/21/the-future-of-employer-sponsored-health-care-strategic-responses-and-cost-containment-opportunities/

• https://aon.mediaroom.com/2022-08-18-Aon-U-S-Employer-Health-Care-Costs-Projected-to-Increase-6-5-Percent-Next-Year

• 9Cuadra, D. (2023, April 4). Are employers picking affordable healthcare benefits? Employee Benefit News. https://www.benefitnews.com/news/are-employers-picking-affordable-healthcare-benefits

• 10Text - H.R.133 - 116th Congress (2019-2020): Consolidated Appropriations Act, 2021. (2020, December 27).  https://www.congress.gov/bill/116th-congress/house-bill/133/text.