How Health Care Trends Affect Employer Benefit Plans

employer health care costsBy Thad Brown, Director, Strategic Client Accounts and Planning

Employer Health Care Costs in 2018

Have you ever examined your annual health care costs, and wondered why your plan is so expensive?

You aren’t alone. Employers expect health care costs to rise 5.5% in 2018, bringing cost management strategies to the forefront of health benefit priorities.

Strategies to Control Costs

In the past five years, health care costs have continued to increase. As a result, employers have been moving to high-deductible health plans (HDHP) and Health Savings Accounts (HSA) as a way of controlling these costs.

employer health care costs

Members have increasingly become more responsible to choose appropriately-priced medical care, such as going to an urgent care facility for minor ailments instead of the emergency room. This cost awareness is giving rise to a consumer trend in health care.

However, we are also seeing a growing momentum to shift cost accountability and control into the hands of providers, using value-based payment models. Value-based health care compensates hospitals and doctors on the basis of patient health outcomes.

Improving the outcomes of employee health for an entire group is a key way to contain the expenses of company health plans.

Cost Trends Affecting Employers, Members & Providers

Opportunities for improving health plan costs have historically come from the following groups—employers, members and providers. Here are the trends we’re seeing with each of these groups.

Employer/Health Plan
  • The movement to HDHPs appears to be losing energy.
  • After shifting health care costs to employees for years, employers are starting to ease off.
  • This leaves less opportunity to stem increases in use of health care services.
  • Employers are working with health plan partners and providers to reduce inappropriate use of services and prescription opioids.
  • employer health care costsEmployers are seeking plan designs that drive members to more affordable care options, such as:
    • Telemedicine.
    • Specialized, high-volume, medical centers of excellence.
    • High-performance networks integrating clinical, operational and communications’ systems.
Member
  • Employee experience with the health care system now has a greater emphasis.
  • Employer-sponsored support helps employees to navigate treatment options and procedures.
  • Wellness programs now provide employer initiatives for employee financial, social, mental and physical health.
  • Wellness incentives and penalties in company-sponsored programs encourage member participation.
employer health care costsProvider
  • A growing focus on value tied to health care outcomes at the lowest cost.
  • More than 20% of employers are experimenting with high value networks and Accountable Care Organizations (ACOs) in select markets. That number is expected to grow to over 50% in the next few years.
  • Providers are assuming additional risk for patients’ outcomes; and medical teams are working to reduce readmissions.
  • The cost of drugs and the need to shop prices is resulting in provider requests to consider the cost of services and prescriptions, before prescribing.

The Goal for Employers

As health care continues to take up a larger part of the overall economy, structural changes—such as the push toward paying for value, greater emphasis on care management and increased cost sharing with consumers—are taking stronger hold, pulling back against rapid health care spending growth.

Over the next three years employers will seek to improve member engagement in health and wellbeing programs, expand the use of analytics and seek to manage the cost and utilization of pharmacy.  Regardless of the strategy, employers will still be challenged to keep costs low for both the employee and the company.

The goal is for employers to provide a high value plan that manages cost for both the company health plan and the employee. MedCost works with our employers to improve health outcomes and to generate a more productive workforce.

Our next series of blog posts will describe six key ways that employers can achieve this goal. Subscribe to our blog now to receive these posts by email. MedCost

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What are the top drivers in your health plan costs? Send your comments by clicking “Leave a reply” below.

 

When Nurse Support Makes All the Difference: One Family’s Story

nurse support

The Vincent White Family

Facing a Difficult Surgery

Vincent White tried everything to get rid of his back pain. Neck clamps. Surgery. Spinal decompression. This lab supervisor at Carolinas Healthcare had persistent pain from a narrowed bone channel housing the spinal cord and nerves.

The calcification worsened. Finally, doctors recommended another back surgery. “He was stumbling around the house,” said wife Lisa. “He could barely move.”

When Lisa walked into her husband’s hospital room after the operation, a doctor from the critical ICU team delivered bad news. Vincent was paralyzed.

“He was in ICU for 21 days,” said Lisa. “Doctors said he probably would not walk again.” Vincent had another surgery while in ICU to repair a spinal cord leak. After six weeks in rehab, he came home to his wife and 11-year-old daughter Olivia.

Experienced Nurse Support
Stepped In

Long before Vincent’s release, Lindsay Spainhour, RN, BSN, the Whites’ MedCost Case Manager*, was working with the medical providers, planners and discharge team. Lindsay followed his progress closely to ensure that he received all the care needed in this crucial time of their lives.

“Lindsay got to know me and took time to care about what my husband and I were going through,” Lisa said. “She got the special kind of air mattress we needed, and told us not to worry about authorization.” nurse supportLindsay called the supplier for Vincent’s wheelchair until it finally arrived. And when Vincent was diagnosed with a wound two weeks after arriving home, she provided education, supplies and questions for Lisa to ask medical staff when Vincent was readmitted to the hospital.

Vincent and Lisa continue to make lifestyle adjustments. He wears a catheter. He can’t take a normal vacation with his family. But Lisa says that their MedCost Case Manager made a big difference.

More Than Just a Job

“She did things she didn’t have to do, to make sure my husband’s needs were met over and beyond. I could tell in Lindsay’s voice that it was more than just a job.

“We sometimes complain about what we pay for premiums, but the benefits of having a case manager like Lindsay far outweighed the cost. Get a case worker. It can save you energy to focus on your family.MedCost


*The Whites gave MedCost permission to share their story to help others realize the benefits of the Complex Case Management program. MedCost Complex Case Management is a program where registered nurses who are also certified case managers work with individuals who have experienced a life-changing illness or injury. The goal of the program is to ensure the best use of available health plan resources while enhancing quality of life.

 

Controlling Specialty Drug Costs (Video)

Specialty Drug Costs Can Be Managed with These Strategies
specialty drug costs

WATCH VIDEO NOW

“It’s interesting that a lot of these specialty drugs are designed for a very small percentage of the population that have a certain disease state,” said Michael Cornwell, MedCost Director of Sales and Underwriting.

“There may be less than 200,000-300,000 people in the country that need that particular drug. That’s one of the reasons specialty drugs are so expensive.”

MedCost Pharmacist Zafeira Sarrimanolis agrees. “It’s an exciting time in the drug manufacturing world, because all of these new medications have been coming out over the past ten years or so for medical conditions that really weren’t treatable before.

“For example, hepatitis C medications previously were not very effective and really hard for patients to tolerate. Now we have new medications on the market that are practically a 100% cure rate for patients.

specialty drug costsThese drugs are also a lot easier for them to take and tolerate. Part of the problem with that is the price tag on some of those new medications.”

“One of the largest reasons people are readmitted to the hospital is because they don’t adhere to the medication,” said Michael Cornwell. “Programs like step therapy ask you to try a clinically appropriate drug before you try a similar but more expensive one.

Prior authorizations probe a physician’s reasoning behind prescription choices. A lot of these specialty drugs are really for a pretty small percentage of the population. So when you look at a population as a whole, the people taking those drugs are usually between 1%-1½% of your population. That’s the good news.

“The bad news is they’re very expensive. Probably the biggest growth area in the specialty arenas are the cancer drugs. There’s a whole pipeline of new cancer treatments hitting the marketplace. But in that pipeline, member education and aid in helping and consulting is a good thing too. It allows us to have some personal outreach try to help these people manage their disease state.MedCost

(This post is a transcript from the video, CONTROLLING SPECIALTY DRUG COSTS.”)

 

Listening to the Voice of the Customer (Video)

Health care is complex. It always has been — even more so today in a continually changing industry and environment. MedCost strives to be the kind of partner that helps our customers navigate, translate and adapt to those changes.

When MedCost started as a small company, we were still using some of the principles we use today. We were sitting down and listening to the unique needs of the customer. We were using data even before there were sophisticated mechanisms to use data. To understand what was driving their costs, what providers they were utilizing, how we can essentially customize some sort of solution, whether it be a product, a program or a service to essentially help them better manage or to achieve what they were trying to achieve with their health plan.

In this time, in this industry, collaboration is more important than ever. We have a legal team, a communications team, a pharmacist, an underwriting team — all designed to essentially help support the employers, and bring some of the best new ideas to the employer to help them engage in new or better health and wellness programs. And also to drive lower costs for their population.

We essentially try to be one single source for an employer to come and partner with them — to not only design but to administer their health plans.

We’re interested in your unique needs. Contact Jason at jclarke@medcost.com or call 336.774.4283.MedCost

(This post is a transcript from the video, “Listening to the Voice of the Customer.” )

Self-Funded vs. Fully-Insured Health Plans (Infographic)

Why are more employers choosing self-funded versus fully-insured health plans? This infographic compares the fixed costs of self-funded employer plans, with potential savings available from health dollars not spent by the company.

In the event that an employer’s claims are larger than projected, stop-loss insurance that is purchased protects business assets.

Self-Funded vs. Fully-Insured

This short video, “Reasons to Consider Self-Funding,” gives four key reasons that over 58% of US employees are enrolled in self-funded health plans. Evaluate these reasons to see what is best for your business.MedCost

(To print this infographic, click on the title and scroll to “PRINT THIS PAGE” at the bottom)

7 Ways to Manage Medical Cost for Employers (Infographic)

medical cost

*Discover more resources about MedCost Care Management programs hereOr browse through seven ways to manage medical cost:

  1. Complex Case Management 
  2. Inpatient Management
  3. Outpatient Management
  4. Telehealth Services
  5. Nurse Health Coaching
  6. Maternity Management
  7. Behavioral Health

To print this infographic, click on the title and scroll to “PRINT THIS PAGE” at the bottom.MedCost

President Trump Orders Pull-Back on ACA

ACA changesBy Brad Roehrenbeck, General Counsel & VP, Legal Services, Compliance

As widely reported over the weekend, within a few hours of his swearing in, President Donald Trump signed his first Executive Order, calling on federal agencies to take immediate steps to curtail aspects of the Affordable Care Act and signaling the new administration’s plans to repeal and replace the Act altogether.

What does the Order say?

The Order itself has little if any tangible impact on the law. The Order states the administration’s official policy of pursuing a complete repeal and replacement of the ACA. It directs the heads of all federal agencies to take steps within their authority to remove or minimize any provision of the ACA that carries fiscal or regulatory burden. As the primary agencies charged with implementing the ACA, that action will likely come from the Department of Health and Human Services, the Department of Labor, and the IRS. The order also directs these agencies to afford greater flexibility to the States in areas impacted by the law. Finally, the order directs federal agencies to take steps to encourage and enable an interstate market for health coverage.

What does the Order mean for employers?

For now, the Order has no real impact on employers, except to signal that federal agencies will be acting quickly to relax various components of the ACA that impact employers, group health plans, and their members. The Senate has yet to confirm those President Trump has nominated to lead the agencies affected by the Order. Once those agency heads are confirmed, we expect to see regulations issued as prescribed by the Order and will be watching closely. Of course, both the Trump administration and members of both houses are said to be working on legislation to repeal and/or replace the ACA. Both the House and the Senate have laid the groundwork for streamlined procedures for repeal of the Act. They face more of an uphill battle to pass legislation to replace the ACA, as a 60-vote majority will be required in the Senate to pass replacement legislation. We will provide updates as details of those efforts become public. Until such legislation passes or further regulations are released, employers should bear in mind that the ACA remains in full force and effect.MedCost

Fully-Insured vs. Self-Funded Health Plans (Infographic)

Has your company examined the differences between fully-insured versus self-funded health plans? Check out this infographic to see why more employers are choosing self-funded plans.

fully-insured versus self-funded health plans

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IRS Announces 2017 FSA Limits

By Michael Berwanger, JD, Director, Quality Management & Compliance

The Internal Revenue Service recently announced the tax year 2017 annual inflation adjustments for more than 50 tax provisions.

Notably, for the first time in two years and consistent with industry expectations, the IRS has increased the dollar limitation under § 125(i) on voluntary employee salary reductions for contributions to health Flexible Spending Accounts (FSA) from $2,550 to $2,600.

The Revenue Procedure 2016-55 provides details about these annual adjustments. The tax year 2017 adjustments generally are used on tax returns filed in 2018.

2017 FSA

 

 

 

For guidance on FSAs, please review the IRS Frequently Asked Questions page.

 

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