Strategies to Limit Healthcare and Benefits Costs
Healthcare costs in the United States continue to rise, which has placed a large responsibility on employers to try and stem those costs for their employees. The rate of healthcare services is increasing while the cost of receiving those services is also increasing. This has created the perfect storm, explained Bill Shimp, a Consultant at ClearPath Benefits Advisors.
“The provider networks, after undergoing significant consolidation, are now able to negotiate higher than normal increases in their reimbursement rate from the insurance company,” Bill said. “So the cost of those services are going up due to the reimbursement rate increases that they’re getting from the insurance companies after they’ve consolidated.”
So, what can employers do about it?
Organizations looking to combat the high price of healthcare for their business and their employee population can attack the issue a few different ways. ClearPath has identified seven measures employers should take:
- Join purchasing cooperatives or captives
- Explore self-insurance options
- Implement spousal waivers
- Reference-based pricing
- Data analytics and predictive modeling
- Wellness initiatives
- Plan design changes.
All of these are viable solutions to lowering the cost of healthcare, but it’s important for employers to discuss the options with a benefit consultant and do a cost analysis of each one to determine which are the best.
“We recommend every employer take a look at all of the options available in the marketplace,” Bill said. “Purchasing cooperatives and captives are available for any employer with more than 50 employees. We believe it should be included in any thorough RFP that any consultant is doing on behalf of their client.”
The Value of Data
As is the case for many facets of a business, utilizing data insights can be incredibly valuable in lowering healthcare costs. When it comes to assessing an employer’s healthcare risk, data analytics can predict particular categories, as well as individuals, that could be a potential large claim.
“It may show you have a very small percentage of your population getting their routine annual physicals,” Bill said. “That could allow you to run a campaign that would incentivize people to get a routine annual physical, which would bring down their cost in the future. As an employer, it’s important to pair with a benefits consultancy company that can provide these kinds of insights.
ClearPath Can Help
ClearPath has partnered with one of the premier data analytics companies in the country. We can bring that partner to the table for clients interested in utilizing data analytics when assessing healthcare cost.
Our analytics partner operates by taking raw claim data from an administrator and then running it through their process, which includes a model from Johns Hopkins University. Once the claim data has gone through the process, they provide insight and analysis to employers about where claims are within the norm and where there are irregularities.
“It can help design a more effective wellness program and an initiative to control future costs,” Bill said. “Data empowers the consultant and the client to be able to make more effective decisions as to the direction of their plan in the future.”
ClearPath’s clients not only have access to advanced data insights, but they also will be consulted by knowledgeable, experienced and successful plan advisors like Bill, who has helped 80% of his large clients (100 employees or more) become self-insured.
“I have extensive experience in working with clients that are either currently self-insured or clients who are interested in becoming self-insured,” Bill said. “I’m able to identify for them whether it’s a good fit and if so what are the proper safeguards to put in place to make sure it’s an effective transition.”