Thursday, Sep 9, 2021
The “win-win” paradigm: Employee benefits that bend the cost curve and prioritize people
Mary McHaleSenior Consulting Director, Health Navigation, Alight Solutions
COVID-19 and the start of an unprecedented pandemic forced an inescapable intersection of our personal and professional lives. Employee priorities changed and so has the conversation around benefits. With no industry untouched by the economic impact of the pandemic, employers have never been more burdened to both inventively protect their bottom line and gatekeep expendable benefits while also radically investing in their people.
Fortunately, containing cost and delivering an employee-centric benefit offering do not have to be mutually exclusive.
There are three strategies employers can flex to reduce healthcare costs while driving true value for employees:
1. Invest in telemental health
Over two-thirds of today’s workforce are wrestling with depression, anxiety or addiction. With constant headlines of violence and natural disasters flooding our inboxes and social media platforms, the heaviness of the world around us compounds that battle and adds stress to our day-to-day lives.
For many, the rising delta variant cases have rekindled feelings of isolation, fear and hopelessness initially ignited by the pandemic. The already staggering accessibility and affordability gaps uniquely tied to the mental health sector have become deeper and wider over the last year – and employers simply cannot afford to be complacent in the problem for a moment longer.
Fortunately, telemental health is turning these long-time affordability and accessibility gaps upside down. At the touch of a button, sophisticated algorithms can match employees with leading licensed psychiatrists, psychologists or therapists uniquely fit to their preferences and clinical needs within minutes. The leading telemental health solutions boast of their vetting processes to secure the most qualified, results-proven provider pool, representing a broad range of specializations and backgrounds. Most solutions also have user-friendly scheduling apps to secure same-day appointments by way of video, audio or texting, making communication with a clinician not only convenient but driven completely by employee preference. The cost per session is dramatically lower than most cash prices with out-of-network clinicians and competitively aligned with standard in-network allowed amounts, making whatever cost-sharing arrangement a win-win for both employee and employer.
Countless studies have revealed that employees with access to available, high-quality clinicians at an affordable price point are tapping into mental health support in ways they otherwise wouldn’t. What’s true for general medicine is true for mental health: improving accessibility to care promotes early intervention, which reduces high-cost interventions that stem from delayed care. Equipping employee populations with elevated mental health benefits reinforces the message that an employee’s wellbeing is a valued priority worthy of employer investment.
2. Deploy tiered networks
Over the years, numerous employers have adopted “narrow network” strategies to cut both employer and employee costs. Narrow networks work by reducing the in-network provider pool to drive patients to a select group of providers, who (in exchange for the exclusivity and uptick in business) agree to a lower contracted pricing for services. While savings are realized via reduced premiums, the narrow network design only results in net cost savings if the narrow network is comprised of high-quality, cost-effective providers, and employees stay within the network.
Lower premiums mean very little if narrow network providers are ordering needless imaging or employees continue to see their beloved PCP of 20 years, who is now out of network. The narrow network design can often translate to employees as narrowed patient choice, which turns out to be one of the fastest, most effective ways of upsetting an employee. In our experience, narrowed network designs mean well, but the dollar savings never seem to outshine the navigation nightmares and benefit dissatisfaction that coincide with executing them.
The better choice for saving employer and employee money without narrowing patient choice OR sacrificing quality is offering a tiered network. Without altering the broad in-network provider pool, tiered networking incentivizes consumers to use designated providers in exchange for lower out-of-pocket costs. This “smarter, not smaller” strategy involves ranking in-network providers using case quality data around outcomes, episodic case-cost and (re)admissions. The providers with the best outcomes and cost-effective track records are given a designated distinction and employee cost-sharing is reduced when leveraged over non-designated or lower tier providers.
Cost savings from narrow network and tiered network designs both rely on successfully steering employees to new providers, but what makes tiered networking more successful is that it steers by incentivizing choice versus compelling it.
For tiered networks to succeed, it comes down to incentivizing the use of a preferred set of providers versus forcing a limited network upon employees.
3. Use data to connect the right people to the right benefits and programs
With healthcare costs on the rise, employers have been on the hunt for solutions that leverage data insights, machine learning and predictive modeling to accelerate benefits engagement and utilization. By partnering with healthcare analytic companies, employers can use the claims and demographic data at their fingertips to deliver personalized messaging that maximize an employee’s visibility and access to benefits and programing uniquely relevant to them.
Whether it is life-threatening preventive care gaps, chronic illness diagnoses or simply a recent birthday indicating eligibility for retirement planning, claims and benefits administration data tell a powerful story of opportunity and need. With so much energy spent artfully crafting cutting edge total rewards packages, employers should be flocking to the strategic solutions that help increase meaningful benefit engagement. A total rewards package with all the bells and whistles is only impressive to the employees who engage with it.
While still maintaining the highest bar of privacy and HIPAA compliance, employers can meet employees in the routine and pivotal moments that matter with targeted guidance and support.
- Health: Enrollment guidance, provider searches, cost comparisons, clinical programs, health savings accounts and benefit program engagement
- Wealth: Financial wellbeing, retirement savings, budgeting and debt management
- Career: Pay, performance, time off and total rewards
The resounding theme echoed across all three strategies is that perhaps the most strategic moves employers can make to reduce healthcare costs are the same moves that will drive the most value to employees. It’s no longer about choosing the least disruptive costs to cut and instead about thinking outside the box to implement benefit offerings that meet real needs in new ways.
As we approach month 18 of the pandemic, the workplace cultures with the most loyalty to their organization and productive engagement are employers who are rejecting the status quo and transforming their benefits and communication strategies to meet the contextualized needs of their employees.
Mary McHale is a senior consulting director at Alight, a leading cloud-based provider of integrated digital human capital and business solutions.