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.

 

How to Help Employees Become HEALTHY & WHOLE (Video)

Ready to Balance the Care of Your Employees
with the Financial Health of Your Company?
HEALTHY & WHOLE

WATCH VIDEO NOW

  • Annual health care costs in America are $3.2 trillion.
  • Employees average 5.3 unplanned sick days per year.
  • That productivity lost is more than 1 and 1/2 hours of an 8-hour day.

When disease management and wellness programs combine, employers average $30 per member per month in decreased health care costs.

HEALTHY & WHOLE

That’s why we’ve developed a comprehensive program called HEALTHY & WHOLE.

HEALTHY & WHOLE encompasses physical, emotional, financial and social health – and
greater job satisfaction for employees.

The goal is to help employers balance the care of employees with the financial health of your
company.

HEALTHY & WHOLE Includes Disease Management

Our nurse health coaches provide hands-on support, helping members reduce blood
pressure, glucose levels and lose weight.

And for complex conditions, case managers provide expert help for families in very difficult
situations.

Over 73% of businesses offer corporate wellness to attract and retain talent, and strengthen
company culture. Another advantage is to encourage enrollment in consumer-directed health
plans, a growing trend.

HEALTHY & WHOLE Supports Lifestyle Changes

HEALTHY & WHOLE addresses not only members with chronic diseases, but the 75% who
need support with lifestyle changes.

Lifestyle changes – even small ones – create measurable outcomes of better health, productivity and bottom line.

The Results of Corporate Wellness Programs

HEALTHY & WHOLE

http://www.nahueducationfoundation.org/materials/WellnessBrochure.pdf

Implementing corporate wellness programs dropped claims costs -28%, doctor visits -17% and hospital admissions -63%.

This same study showed disability costs down -34% and injury incidence down -25%.

An employer we worked with said that he is passionate about having happy employees. If they
are happy, they will be productive and engaged.

A Program That Benefits Employees and Companies

Lifestyle coaching. Financial education. Fitness. Nurse health coaching. Long-term medical
conditions. HEALTHY & WHOLE serves everyone’s needs, including your company’s.

We want to see everyone HEALTHY & WHOLE. That’s why it’s important to us to balance the care of your employees with the financial health of your company.MedCost

HEALTHY & WHOLE

PLAY VIDEO

(This post is a transcript from the video, “MedCost HEALTHY & WHOLE.”)

For more information on wellness consultations for employers, email Kati Davis.

 

Telemedicine: Yes, There’s a Doctor in the House

telehealth A sick child might have a fever at 3:00 am. Or the family might be visiting grandparents a long way from home. But if an employer-sponsored health plan includes telemedicine services, a board-certified doctor’s consultation is only a phone call away.

Employers Are Choosing Telemedicine

An overwhelming 96% of US employers plan to offer telemedicine services in applicable states* in 2018, the National Business Group on Health reports. The reasons for this rapidly growing health benefit are obvious:

  1. Quick ResponseTeladoc, the nation’s largest provider of telemedicine consultations, averages 22 minutes for a call-back from a licensed, board-certified doctor who practices in the caller’s state.
  2. Convenience. This consultation can be held by phone or online. Teladoc requests some medical information before having the doctor return the call.
  3. Appropriate Care for Less. Almost 80% of adult Emergency Room visits are due to lack of access to other providers.** Access to telemedicine visits can limit hours spent away from work, as well as more expensive care at any hour, day or night.

Telemedicine Offers Treatment Alternatives

Telemedicine consultations are not meant to replace primary care providers. But if an employee has one of the minor ailments listed below, 24/7 access is convenient, and reduces spiraling costs for the employer and the employee.

Treatment Alternatives to the Emergency Room

Telemedicine

Common conditions treated through a telemedicine phone call or online visit are:

  • Infections
  • Allergies
  • Pain
  • Minor joint trauma
  • Gastroenteritis (stomach flu)

Telemedicine Services Are Expanding

Teladoc has expanded optional services for employer health plans to include behavioral health. If an employer chooses to add this option, experienced psychiatrists, therapists and counselors would be available at a flat, per-encounter fee. Members can choose to see the same provider throughout the course of care.

Behavioral health conditions*** range from:

  • Stress/anxiety
  • Depression
  • Addiction
  • Domestic abuse
  • Grief counseling

Just a Phone Call Away

Need a better prescription for your health care expenses? Expert care from area doctors may be available with a phone call, whether on vacation at Disney World or in pajamas at 3:00 a.m.

With telemedicine services, there is a doctor in the house.MedCost

______________________________________________________________________________

*Teladoc operates subject to state regulation and may not be available in certain states.

**“Emergency Room Use Among Adults Aged 18-64: Early Release of Estimates from the National Health Interview Survey, January-June 2011.” National Center for Health Statistics. May 2012. https://www.cdc.gov/nchs/nhis/releases.htm (accessed October 31, 2017).

***Consult your employer’s summary plan description for complete coverage details.

Prescription Insurance: Why Are Costs Rising?

MedCost pharmacistBy Zafeira Sarrimanolis, PharmD, MedCost Clinical Consultant

Prescription insurance has become an increasingly major cost for employers. New drug approvals by the US Food and Drug Administration (FDA) are expected to escalate this year with multiple innovative drugs already being approved for cancer, multiple sclerosis and other conditions.

As researchers discover more treatments, costs will continue to climb. For this reason, smart management of pharmacy plans will be even more vital for employer health plans.

2017 Drug Pipeline

2016 saw a below average number of drug approvals. 2017 is expected to bounce back with 30+ new specialty drugs.

Specialty medications are high-cost prescription drugs used to treat complex conditions. The blue bar (below) shows specialty medication drug approvals. The green bar represents traditional brand and generic drugs. Technology, innovation and new scientific discoveries have caused specialty medication drug approvals to rapidly increase over the last few years.

prescription insurance

Growth of Novel Drugs in Prescription Insurance

In 2016, 22 novel drugs were approved, which was the lowest number since 2010. A novel drug is an innovative product with a unique chemical structure that has never been approved by the FDA before.  Typically novel drugs meet an unmet medical need.

prescription insurance As of May 5th, 20 novel drugs have already been approved this year. It’s an exciting time for healthcare as we treat more complex conditions and improve member health and quality of life.

But it comes at a cost – literally.

 

Summary

When 1% of prescriptions drive 40-45% of an employer’s pharmacy spend, avoiding wise management is no longer optional. Part of my role as a MedCost Pharmacist is to emphasize the importance of cost-management strategies to our employers and consultants.

prescription insurance

I also work closely with our clients to help employers understand the importance of educating their employees about these changes and why they are needed.

It’s all about making sure each employee gets the right drug for the right medical condition at the right time. That’s how we control pharmacy costs.MedCost


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Is Your Company Making These 4 Errors with Health Care Data?

errors health care dataThe United States wastes $275 billion annually on health care spending through inefficient record-keeping, duplicated files, fraud or abuse, according to Truven Health Analytics. Nearly $9,000 per second is lost on illegible writing, incomplete entries or inaccurate interpretations of data.[i]

In this era of massive data generation, how can companies ensure accurate analyses of their employees’ population health? Here are four common data errors to avoid:

1. Making business decisions based on “uncleansed” data.

Electronic health records today overflow with complex treatments, prescriptions, lab results and other tests. Incorrect synthesis of these outcomes can obscure a 360-degree view of past medical history and future potential problems.

MedCost creates detailed reporting with Deerwalk software to help clients identify both medical and financial trends. Sophisticated analytics identify areas of data where misinterpretation may occur. When data is integrated and “scrubbed,” employers may then be assured of making accurate decisions based on those results.

 2. Assuming that claims are processed correctly.

Data integrity is key to avoiding skewed results. Were monthly premiums accidentally included in claim expenses? Have claims been duplicated? Were pharmacy costs integrated with the right patient’s claim?

errors health care dataNo one would try to calibrate a car’s multiple computer systems without the right training and equipment. Not using standard query entries will produce data sets of unreliable results for financial and medical decisions. The company that manages your health plan benefits should do rigorous quality assurance audits before releasing “cleansed” data to you.

3. Failing to use technology to protect your group of covered members.

The operating rule of today’s digital health care is that if it can’t be measured, it can’t be managed. How can a company uncover excessive medical costs or emerging health issues for employees, unless clinical and claims data is tracked?

Smart businesses track profit and loss columns. Smart businesses also keep a close eye on cost trends to reduce medical spend and improve population health for employees. MedCost as a benefits administrator delivers monthly reports with specific cost analyses and recommendations to each of our clients.

4. Ignoring cost trends that are wasting your health care dollars.

Health care, despite the tsunami of data generated, is still about people. How can an employer know when an employee’s blood pressure is out of control? When blood glucose levels have gone sky-high? When prescribed meds are no longer being taken? Without careful analysis of gaps in care, expensive treatments won’t be avoided. And employee health conditions may worsen that could also have been prevented.

errors health care dataAre these errors with your health care data costing your company thousands of dollars? Consider using quality analysis by a reputable benefits administrator to clarify complex data, while managing population health and more efficient health care spending.

Download our free white paper, “Transforming Data into Dollars, with proven practices of how employers can achieve cost-effective outcomes and healthier employees.MedCost

 

[i] “Claims Audit Solutions,” Truven Health Analytics™, http://truvenhealth.com/portals/0/assets/emp_12181_0113_auditsuiteoverviewbrochure.pdf (accessed April 13, 2017).

Four Corporate Ideas for Employee Wellness Programs

Stories of Success

If you’re one of the 80% of employers who have offered employee wellness programs and information,[i] you may be searching to see what is working at other companies. Developing a culture of wellness can decrease sick leave absenteeism by an average 28%, and workers’ compensation and disability costs by an average 30%.[ii]

employee wellness programs

How can you increase your employees’ job satisfaction and overall health, while saving hard-earned health care dollars? Here are four power ideas for more successful employee wellness programs

1. Offer Choices.

One size does not fit all in employee wellness programs,” said Crystal Spicer, MedCost Human Resources Manager. As a company offering financial and health solutions for employer benefit programs, clients were asking what wellness outreach MedCost was doing for their own employees.

The MedCost HR team realized that what worked for one employee didn’t necessarily fit another. So the company’s wellness committee designed a point-based program with multiple ways to boost health and earn financial incentives.

The annual program, kicked off in 2016, measured points earned for employee wellness activities on a quarterly and a yearly basis. This chart shows multiple ways that MedCost employees could earn points for the financial incentives at year’s end:

employee wellness programs

“We got people’s attention, which is what we were striving for,” said Crystal. One group of women came to work an hour early to walk together – even climbing stairs.

A Weight Watchers group cosponsored by the company attracted 20 people. Sherry lost 56 pounds. Glenn lost 36. Trish, motivated on her own, lost 40. And their new habits of exercising and eating helped them keep it off.

MedCost offered $100 drawings quarterly for those who met point goals. At the end of 2016, those who accrued the 2,400 points will receive a $500 contribution into their personal Health Savings Account.[iii] Employees enrolled in a Preferred Provider Organization plan could earn a gift card for $250.

Fitness classes offered after work onsite were another way to add points. The company shared costs with employees who signed up for the six-week classes. From the beginning, classes were well-attended.

Financial incentives are effective for successful employee wellness programs. Four out of five employers use financial incentives to promote wellness.[iv]

“Getting buy-in is key,” said Crystal. “Earning these financial incentives are obtainable because there are a whole variety of ways to get there.

2. Incorporate Employee Suggestions

employee wellness programs

Figure 1. Several MedCost employees at the 2016 Heart Walk

Our annual support of the Triad American Heart Association’s walk hit new levels this year – and not just financially. Jenny implemented a leadership contest to raise the most employee contributions, with the winner earning the right to wear this Southern Lady hat, red beads and tutu (See Figure 1).

Brad (in the lovely hat and tutu) definitely stood out in the crowd of 7,500 walkers through downtown Winston-Salem.

But even better were the 125 employees, family members and friends who walked between one to four miles on October 29th. Dogs, babies in strollers, music and laughter made this emphasis on healthy hearts a lot of fun.

Another employee suggestion resulted in a weekly “Walk with Me Wednesday” event, beginning in 2015. MedCost is located in a business park with sidewalks, gazebos and ponds. An average six to eight employees walk 15 minutes together at noon, enjoying fresh air, camaraderie and exercise in a beautifully landscaped setting.

employee wellness programs

Figure 2. MedCost on Kimel Park Drive, Winston-Salem, NC

One key benefit of this weekly walk is better connectivity among the employees who walk together. In many businesses, department knowledge is often siloed from other departments because of different functions. And employees don’t get to know each other.

“The walks really do benefit the mind as well as the body,” said Karen, a 16-year employee at MedCost. “Walking with others just motivates me to get out and walk.”

 

3. Take a Long-Term Approach to Your Return on Investment (ROI)

“Looking purely at hard costs, healthcare spending can be one of the largest single expenses for a business, next to payroll,” said Dan Birach, president of HEALTHWORKS division at Carolinas HealthCare System. [v]

“Statistics show that for every dollar an employer invested in areas such as wellness programming and disease management, they enjoyed an ROI of anywhere from $1.50 to $3.80. Healthy employees are more productive and miss fewer days.”

The Society for Human Resource Management reported that 80% of employers offered preventive wellness services and info in 2015.[vi]

Employee wellness programs are having an impact on reduced dollars spent on health benefits. When corporate wellness programs were implemented:

  • Claims costs reduced 28%
  • Doctor visits reduced 17%
  • Hospital admissions reduced 63%
  • Disability costs were down 34%
  • Incidence of injury reduced 25%[vii]

“A wellness program can make just a small difference at first,” said Crystal. “It has to build gradually.”

Employers offering wellness programs are looking for the same key ingredient for their employees – motivation.

4. Motivate Your Employees for Better Quality of Life

employee wellness programs

Figure 3. Claudia Johnson before losing weight

Claudia works with providers (hospital systems, medical offices and other professionals) at MedCost. When doctors diagnosed medical issues exacerbated by her obesity, she took a hard look at her lifestyle. And wanted to change.

“I am involved in Christian ministries in my personal life,” Claudia said. “I wanted to be in better health. My family and friends supported me to make some new choices.”

MedCost wellness choices inspired Claudia to do things differently. In January of 2016, she braved the cold temperatures to begin walking every morning at 7:30 a.m. with several other employees. She climbed stairs at lunch. She focused on her health.

“I’ve lost 30 pounds,” Claudia said. “I love the fact that I have gone from a size 22 to a size 18. My grandchildren are ten and six. I have to get rid of some more of this weight to keep up with them.”

employee wellness programs

Figure 4. Claudia Johnson after losing 30 pounds

Summary

Inspire your employees. Fit your wellness program to your unique business style and culture. One size won’t fit all, so try different ideas to see what resonates with your employees.

Above all, pour on the encouragement. Your employees are spending a large chunk of their time working for you. Your support may not only boost your bottom line, but improve your employees’ health in a life-changing way.

Your company will produce not only satisfied customers, but loyal, healthier employees.MedCost

 

 

[i] “Eight Things You Need to Know about Employee Wellness Programs,” Alan Kohll, Forbes, April 21, 2016, http://www.forbes.com/sites/alankohll/2016/04/21/8-things-you-need-to-know-about-employee-wellness-programs/2/#4097a3e13e2d

[ii] “Be Stronger, Live Better,” National Association of Health Underwriters Education Foundation, http://www.nahueducationfoundation.org/materials/WellnessBrochure.pdf

[iii] For those enrolled in a High Deductible Health Plan with the company.

[iv] Incentives for Workplace Wellness Programs,” RAND Corporation, http://www.rand.org/pubs/research_briefs/RB9842.html

[v]  “Five Things to Consider When Planning Your Wellness Program,” Dan Birach, HEALTHWORKS Division, Carolinas HealthCare System,  http://www.carolinashealthcare.org/medical-services/prevention-wellness/employer-solutions/healthworks/info-hub

[vi] Kohll, ibid.

[vii] National Association of Health Underwriters Education Foundation, ibid.

A Pharmacist Looks at the Opioid Epidemic

By Zafeira Sarrimanolis, PharmD, MedCost Clinical Consultant

The statistics prove it — more Americans die from accidental drug overdoses each year than from traffic accidents. Data from 2014 showed more deaths from drug overdoses than any other year on record.[i]  Approximately six out of 10 of those deaths involved opioids.[ii]

opioid epidemicSource: Centers for Disease Control and Prevention[iii]

The week of September 18-24 was designatedPrescription Opioid and Heroin Epidemic Awareness Week.”[iv] As a pharmacist, I know that opioid medications can be beneficial in controlling certain types of pain. However, this benefit must be weighed against the risks associated with these medications.

The Epidemic

The number of opioid prescriptions in the US quadrupled from 1999 to 2014, while the number of American reporting chronic pain remained constant.[v]

Opioid pain medications like Opana, OxyContin and Percocet were originally used to treat short term-pain, such as after a surgery or accident, and for long-term pain associated with cancer. Today, we see these medications prescribed and utilized more commonly for all forms of pain and over longer periods of time.

The diagram below highlights opioid prescribing patterns in the US. In some states, including NC, the number of painkiller prescriptions per 100 people is equal to or exceeds 100.[vi]

opioid epidemicThere are many sources of misused opioid prescriptions. The majority, approximately 60%, of misusers obtain opioid medications from a friend or relative, either for free, by stealing or by buying them.[vii] 

 

The Dangers

Imagine you are in a car accident and have persistent back pain that makes it difficult for you to sit and stand

comfortably. The doctor prescribes an opioid medication used regularly to control your pain.  Soon you find that you have become dependent on this medication—even after your back feels better.

This scenario happens more often than we think. The danger of opioids is that they can become addictive to any user. For this reason, they should only be prescribed in appropriate cases.

In addition to risk for addiction, these medications are dangerous because of side effects like sedation and respiratory depression. These effects can be compounded when combined with other medications. For example, a common drug interaction with Xanax (a medication used for anxiety) can lead to slowed breathing, oversedation and possible death.

Action Steps

The fight against the opioid epidemic requires action from everyone. Prescribers and pharmacies are more regularly monitoring those taking opioid medications. In North Carolina, the Board of Medicine and Board of Pharmacy have strategies to control these medications to decrease utilization and death from opioid abuse and overdose.

The opioid reversal agent, naloxone, is more readily available from retail pharmacies. Efforts are being made to increase access to treatment for addiction. Communities are educating the public on the dangers of opioids and offeopioid epidemring “take-back” programs for disposal of unused opioid medications.

In July, the US Senate passed the Comprehensive Addiction and Recovery Act, the first major federal legislation on addiction in 40 years. The purpose of this law is to expand education, strengthen state monitoring programs and create new treatment programs.

Real progress can only result when doctors, nurses, pharmacists, patients, government officials, community leaders and the family and friends of those affected work together to put an end to the opioid epidemic.

Pharmacist on Staff for Clients

As the new MedCost Pharmacist, I discuss pharmacy management strategies with clients and brokers to control the explosion of drug costs. Prior authorizations, step therapy programs and quantity limits can be frustrating and disruptive. But we know that these utilization management strategies are key in controlling costs. 

Our partnership with OptumRx, ensures that members take safe, effective medications appropriate for their conditions, while implementing cost-saving strategies.

Opioid epidemic

 

 

 

 

 

 

 

 


Source: 
Mercer National Survey of Employer-Sponsored Health Plan -2015l[i]

Our goal at MedCost is to help ensure that our clients’ covered members are being treated appropriately and safely, without the risk of exorbitantly high costs. This will not only be the most cost-effective strategy, but it can result in members with healthier, happier lives.MedCost

 

[i] “The Opioid Epidemic: By the Numbers,” US Health & Human Services, June 15, 2016, http://www.hhs.gov/sites/default/files/Factsheet-opioids-061516.pdf (accessed September 26, 2016)

[ii] “Injury Prevention & Control: Opioid Overdose,” Centers for Medicaid and Medicare Services, https://www.cdc.gov/drugoverdose/data/index.html (accessed September 22, 2016).

[iii] Ibid.

[iv]Office of the White House Press Secretary, September 16, 2016, https://www.whitehouse.gov/the-press-office/2016/09/16/presidential-proclamation-prescription-opioid-and-heroin-epidemic (accessed September 22, 2016).

[v] Guideline for Prescribing Opioids for Chronic Pain, Centers for Medicaid and Medicare Services, March 16, 2016, http://www.cdc.gov/mmwr/volumes/65/rr/rr6501e1.htm (accessed September 22, 2016).

[vi]  “Injury Prevention & Control: Opioid Overdose,” Centers for Medicaid and Medicare Services, http://www.cdc.gov/drugoverdose/data/prescribing.html (accessed September 22, 2016).

[vii] Ibid.

[viii] Bruce Lee, “With the Excise Tax in Their Sights, Employers Hold Health Benefits Cost Growth to 3.8% in 2015,” Mercer, November 19, 2015, http://www.mercer.com/newsroom/national-survey-of-employer-sponsored-health-plans-2015.html (accessed September 22, 2016).

Employee Deductibles Rise Faster Than Wages

ks110111-medEmployer health insurance expenses continued to rise by relatively low amounts this year, aided by moderate increases in total medical spending but also by workers taking a greater share of the costs, new research shows.

Average premiums for employer-sponsored family coverage rose 3.4% for 2016, down from annual increases of nearly twice that much before 2011 and double digits in the early 2000s, according to a survey by the Kaiser Family Foundation. (Kaiser Health News is an editorially independent program of the foundation.)

But 3.4% is still faster than recent economic growth, which determines the country’s long-run ability to afford health care.

And the tame premium increases obscure out-of-pocket costs that are being loaded on employees in the form of higher deductibles and copayments. Another new study suggests those shifts have prompted workers and their families to use substantially fewer medical services.

For the first time in Kaiser’s annual survey, more than half the workers in plans covering a single person face a deductible of at least $1,000. Deductibles for family plans are typically even higher.

Deductibles are what consumers pay out of pocket before the insurance kicks in. Employers sometimes contribute to pre-tax accounts to help workers pay such costs.

Employers have been flocking to high-deductible plans in recent years, arguing that exposure to medical costs makes consumers better shoppers.wingeddollar-sm

It also saves employers money. Having workers pay more out of pocket shaved half a percentage point off premium increases of employer-sponsored plans in each of the past two years, Kaiser researchers calculated.

Since 2011, the average deductible for single coverage has soared 63%, according to the survey, while workers’ earnings have gone up by only 11%.

Microsoft PowerPoint - 20160825 Cumulative Slides [Read-Only]

 

 

(Kaiser Health News, Jay Hancock and Shefali Luthra, September 14, 2016)

Kaiser Health News, a nonprofit health newsroom whose stories appear in news outlets nationwide, is an editorially independent part of the Kaiser Family Foundation.

 

Is Your Health Plan Affected by the Cadillac Tax?

One-Fourth of Employers Now Offering CDHPs to Avoid Tax

Employers continue to take action to avoid the looming excise or “Cadillac” tax on more expensive health insurance for their employees. This Affordable Care Act tax of 40% annually is currently set to take effect in 2020, but it is already having a major impact.

A 2015 Mercer study found that total health benefits cost averaged $11,635 per employee.[i] Cadillac taxThis average amount exceeds the Cadillac tax’s threshold of $10,200 for individuals, and would trigger the 40% tax on benefits above the threshold. And small employers are seeing higher increases in medical, dental and other health benefits than large employers.

Employers Turn to
Consumer Plans                                             

For the first time, 25% of covered employees are now enrolled in Consumer-Driven Health Plans (CDHP). Large employers of 20,000 or more employees have added CDHPs the fastest (73%). A projected 34% of employers with 50+ employees will be subject to the excise tax in 2020 if they make no changes to their current health plans.

 Cadillac tax

 

High-Deductible Health Plans (HDHP) are a type of Consumer-Driven Health Plans. Employers are saving an average of 18% with an HSA-eligible HDHP instead of a traditional Preferred Provider Organization (PPO) plan.[ii]

One key reason that employees are researching medical costs in advance for services such as maternity care, joint replacements and Emergency Room visits. A 2015 Consumer Health Insights’ survey showed that 22% always talked to others about costs or searched websites for information.[iii]

Employees who have a telemedicine option in their health plans can choose a more appropriate level of Cadillac taxcare for certain respiratory infections, fevers and nausea (see “Treatment Alternatives to the Emergency Room”). Choosing the right level of care reduces time away from work, boosting productivity. And employees save unnecessary dollars from their own pockets.

Some employers offer pricing transparency tools such as HealtheReports™ which compares costs for a complete procedure. Employees can review local facilities that offer mammograms, colonoscopies, X-rays and other services. HealtheReports also lists comments from members about their recommendations for health care organizations.

A New Era in Health Care

CDHP plans require a shift in thinking about medical spending. In traditional plans, employees are used to handing over their insurance card and paying a small copay.

PiggyBankIt can come as a jolt to employees to realize that CDHP coverage begins with paying expenses up to a higher deductible before insurance kicks in. For this reason, employers must proactively educate employees when introducing CDHP options.

Our next blog will detail key steps for employers to take in providing tools for smart decision-making. Employers who can manage staff expectations with a balanced understanding of the changing health care industry will build a productive partnership with your team.MedCost

 

[i] “With the Excise Tax in Their Sights, Employers Hold Health Benefits Cost Growth to 3.8% in 2015,” Mercer Global, November 19, 2015, http://www.mercer.com/newsroom/national-survey-of-employer-sponsored-health-plans-2015.html (accessed August 8, 2016)

[ii] Ibid.

[iii] “Debunking Common Myths about Healthcare Consumerism,” McKinsey & Company, December 2015, http://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/debunking-common-myths-about-healthcare-consumerism (accessed August 11, 2016)

The Employer Benefit First Offered by NASA

The first place this employer benefit was offered wasn’t even on planet Earth.telemedicine employers

The idea to assess human health from afar started with NASA in the early 1960’s. Both American and Russian doctors were concerned that astronauts might lose circulation and other functions in space. The first telemedicine was practiced on animals attached to medical monitors while orbiting Earth.

TV viewers became familiar with live updates on astronauts’ heart rates, breathing and temperature during space flights. And the technology has translated right into employer benefit plans for medical care for onsite and offsite workers.

Over 15 million Americans obtained medical care remotely in 2015,[i] and the American Telemedicine Association anticipates 30% growth in 2016. Employers have picked up on the cost savings and convenience—nearly 75% of large employers plan to offer telemedicine as a health plan benefit in states that regulate this method, up from 48% in 2015.[ii]

telemedicine employers

Why Telemedicine?

Employers are searching for ways to contain the spiraling costs of health care. The ability for employees to make a call or have a video conference with a board-certified doctor within minutes brings both convenience and less time away from work. A recent analysis by Willis Towers Watch estimated that as much as $6 billion per year could be saved by U. S. companies using telemedicine.[iii]

Where the Savings Come From

Employers are seeing the need to educate employees about the best medical options for every health need. Some fevers, headaches, sore throats and other minor symptoms are appropriate for a telemed call (see “Treatment Alternatives to the Emergency Room”). Average cost: $45.

Compare the cost of a telemed call with an average primary care doctor visit: $145. Or the average cost of an ER visit: $1,316. [iv] Your employees with commutes to work may have to travel longer distances for in-person visits—time also lost in productivity. And many employees allow conditions to worsen before seeking treatment, resulting in even higher expense and time away from work.

“Over 400 million visits a year are appropriate
for telehealth.”

 – Jason Gorevic, Teladoc CEO, NJTV News

Managing Costs in a Complex Environment

As responsibility for paying health bills shifts to the employee, 24/7 services such as Teladoc becometelemedicine employers an increasingly attractive option for appropriate levels of medical care. A board-certified doctor is always available with a cell phone callback, even if an employee is on vacation or lives in a rural area where medical access is more limited.

MedCost clients who use Teladoc have already saved hundreds of thousands of dollars in 2016, avoiding more expensive treatment centers and lost hours at work.

Looming in employers’ minds is the Affordable Care Act’s Cadillac tax, now postponed until 2020. This 40% excise tax would trigger when an employer offers health benefits above $10,200 for an individual and $27,500 for a family.

Employers have already begun to raise employee deductibles and out-of-pocket costs, not included in the value of a health policy.

Summary

Some large employers such as JetBlue Airways are installing telemed kiosks at their workplaces, harnessing technology innovations for immediate care.[v] The Department of Veteran Affairs provided telemedicine employerstelemed services to more than 675,000 veterans in fiscal 2015. Employees who are used to searching for restaurants and shopping deals on cell phones will increasingly call a doctor to get routine medical care.

And it won’t even require a trip to outer space to get it.

 

[i] Melinda Beck, “How Telemedicine Is Transforming Health Care, Wall Street Journal, June 27, 2016, http://www.wsj.com/articles/how-telemedicine-is-transforming-health-care-1466993402 (accessed July 14, 2016)

[ii] National Business Group on Health, “Health Care Benefits Cost Increases to Hold Steady in 2016,” August 12, 2015, https://www.businessgrouphealth.org/pressroom/pressRelease.cfm?ID=263 (accessed July 18, 2016)

[iii] Willis Towers Watson, “Current Telemedicine Technology Could Mean Big Savings,” August 11, 2014, https://www.towerswatson.com/en-US/Press/2014/08/current-telemedicine-technology-could-mean-big-savings (accessed July 15, 2016)

[iv] Sabrina Rodak, “Study: 71% of ED Visits Unnecessary, Avoidable,” Becker’s Hospital Review, April 25, 2013, http://www.beckershospitalreview.com/capacity-management/study-71-of-ed-visits-unnecessary-avoidable.html (accessed February 23, 2016)

[v] Phil Galewitz, “Kaiser: Your Doctor Will See You Now,” June 20, 2016, http://www.usatoday.com/story/news/2016/06/18/kaiser-how-far-telemedicine-has-come/86084092/ (accessed July 18, 2016)