As the average cost of employer-provided health insurance continues to rise, everyone is in search of innovative cost management solutions.
In recent years, businesses have turned to higher employee contributions, high deductible plans and promoting healthcare spending education to try to keep cost in check.
As experts continue to develop new strategies for controlling health costs, some efforts have drawn closer attention. Here is a look at three of those efforts – social determinants, self-funded trusts and onsite care – and how they work.
1. Social determinants
One approach many firms are taking is looking at the Social Determinants of Health (SDOH) to prioritize what benefits programs to offer.
Social determinants refer to the environmental conditions that affect people’s quality of life and health outcomes – whether an individual has access to safe housing, transportation, job opportunities and nutritious food.
By analyzing the social risk employees are exposed to, Benefits pros can more effectively refine benefits packages and design location-specific programs that better serve employees’ needs.
Identifying social risk and quantifying opportunities gives Benefits pros the ability to enhance benefits packages to help improve the lives of employees, particularly those experiencing greater socioeconomic disparities and/or health inequities.
They can leverage the data to better match new and existing intervention programs to employees’ social needs and health equity drivers. This leads to better health outcomes and business performance – higher retention rates, more productive recruitment, improved presenteeism and lower absenteeism.
Wide range of data points
Getting a good understanding of how social risk impacts employees requires identifying, reviewing and tracking a wide range of data points.
- Shift to remote work also applies to health care. Today’s workforce is highly distributed, with more companies embracing remote and hybrid work models as the new norm. The notion of virtual business has also spilled over into other aspects of employees’ lives, including the authorization of telemedicine on the majority of health plans. Employees want this to remain, so it’s critical healthcare benefits include improved telemedicine as an everyday, safe, effective and convenient option.
- Social support programs remain critical. Just as telemedicine emerged as a widespread healthcare option, social support programs quickly became employees’ lifelines. Programs that offer education and support regarding food and nutrition as medicine, medical transportation, pharmacy refill literacy, copay coupons and temp housing remain crucial to recovery post-pandemic. Benefits pros should weave these programs into their overall benefits plans to provide timely support and foster a more engaged, healthy workforce.
- Mental and behavioral health support is vital. There always has been and will continue to be a dire need for more mental health programs. The pandemic highlighted this weakness in our healthcare system. In 2021 and beyond, employee benefit design must improve access to mental and behavioral health support. The advent of expanded telemedicine options, like the model offered at Eden Health, can be leveraged to provide more accessible, professional counseling options and mental health care.
By establishing a new, corporate focus on SDOH and its role in worsening clinical conditions and missed workdays, Benefits pros have the power to improve employees’ health, happiness and productivity.
2. Self-funded trusts
(Here is a real-life account of self-funded trusts, courtesy of Terry Cline, HR director, BancCentral National Association, Alva, OK.)
Keeping our employee health costs down was a struggle. That’s when we tried a self-funded healthcare plan.
I tracked the utilization data over five years – which we weren’t able to do before in a traditional, fully funded health insurance plan – and it was enlightening.
For example, we learned that our pharmaceutical costs were high because some of our people take medications that are on the expensive side and don’t have a good generic equivalent.
We have a more accurate picture of what our health benefit costs are going to be for the year.
On the other hand, the tricky part about self-funding is it favors larger employers.
Having 500 employees contributing premiums, along with stop loss insurance, helps balance out an unexpected wave of costly claims.
However, if you have 100 employees like we do and 10% of the workforce starts having major health issues – a legitimate concern during the coronavirus pandemic – it would increase costs substantially.
We learned that in addition to company size, workforce demographics have a major impact when it comes to self-funded health benefits.
In our case, we have many young women who may be considering having children and a lot of older men. These two groups draw high health costs.
Also, in a self-funded model, employees who become especially high-maintenance are subject to being “lasered out.”
It means that instead of raising the premium for all employees because of a lot of high-dollar claims, the carrier adjusts the coverage for high cost employees and the employer maximum out of pocket cost gets raised.
Designated fund handler
After expressing concerns to our benefits broker, they referred us to a partner that acts as a trust for employers our size in our industry that have also gone the self-funded route.
This self-funded trust reduces our administrative burden by managing the funds designated for our employee health plan.
The trust is industry-specific so it understands our needs and has helped us get a more accurate picture of what our health benefit costs are going to be for the year.
There’s still a chance down the road we may go back to a fully funded employee health insurance plan because leadership may start having second thoughts about the amount of employer-assumed risk under a self-funded plan.
But because it’s kept costs stable throughout the pandemic, we’re sticking with the self-funded trust –at least for now.
3. Onsite clinics
Advocates for onsite clinics say the biggest benefit is they offer employees medical services by licensed professionals at a reduced cost.
While some clinics are fully onsite, others are located nearby or in a shared clinic, giving staff easy access to services.
They are growing in popularity as a cost containment solution.
Many onsite clinics now refer to themselves as “health and wellness centers.” They can provide an array of medical and health services related to general first aid, primary care, acute and specialty care, occupational health, and beyond.
Healthcare providers can give physicals, treat minor injuries, administer wellness exams, provide nutrition counseling and even manage chronic conditions. Employees can seek guidance and treatment for various conditions and receive specialty referrals as needed.
Just like healthcare plans, employers can choose to cover only participating employees or extend benefits to their spouses and dependents.
Offsite clinics are often located conveniently close to the workplace. These clinics are common for companies that have multiple offices or employees at different worksites. Therefore, employees can access services and products that they would otherwise have to leave work to utilize.
Onsite clinics demonstrate a unique investment in employee wellness, which can help boost engagement and retention.
Onsite clinics can also help you increase workplace productivity since employees spend less time away from the office.
Workplace clinics drive employee and company savings, as corporate clinic services reduce loss in annual profits by ensuring employees have easier access to services.
For instance, employees who don’t have onsite clinic access may visit the local ER or urgent care for minor services, raising out-of-pocket expenses and wait times.
Regardless of company size, employer sponsored health clinics can serve employees by offering preventive care, annual screenings, acute care, or other services at minimal to no cost. Private companies, public employers and union groups can all sponsor these facilities.