7 cost-cutters youfll need to fight emerging healthcare trends
by Jared Bilski
April 14, 2015 - BenefitsAlert.com
Healthcare costs are on pace to increase at record lows this year, but
therefs a perfect storm of cost-drivers ahead.
In fact, there are a number of trends – increasing drug costs, the ACAfs Cadillac Tax, etc. – that can have drastic
effects on unprepared employers.
At the Mid-Sized Retirement and Healthcare Plan Management Conference
in San Diego, benefits consultant Marybeth Gray spoke about the necessity of
developing a long-term plan to prepare for these costs drivers.
Here are some of the best practices Gray cited in her presentation:
The big picture
1. Only offer a CDHP. Nearly half (48%) of employers offer a
consumer-driven health plan (CDHP), but just 7% of
firms offer this plan as their only option.
In 2014, CDHPs coupled with a health savings account cost 18% less than
a PPO, and 20% less than an HMO.
Plus, these plans can help employers avoid triggering the Excise Tax. Reason:
Because high-deductible premiums – the determining factor for excise-tax
calculations – are generally lower than other plans.
Making the switch to a CDHP-only workplace is a lot easier when employers
make the move gradually over a two- to three- year period.
Gray suggests beginning the process with a letter from your companyfs CEO,
listing the total costs of benefits and spelling out the reasons for the
move.
2. Control rising drug costs. Pharmacy drugs account for 25%
of employersf health cost increases, and itfs only likely to get worse with the
surging growth of specialty drugs.
By 2016, eight out of the top 10 drugs are expected to be specialties, which
donft offer identical generic alternatives. To prevent drug costs from spiraling
out of control:
- Look to join a purchasing coalition, which exerts pressure to improve
quality and reduce employer and employee spending.
- Always start with step therapy where lower-cost therapy is tested before
using expensive options like specialty drugs.
- Stress quantity control, where workers ask for a small dosage of a new
drug before committing to a 90-day supply.
3. Add a spousal surcharge. In 2015, 39% of employers are
adding a surcharge. Over the next three years, 61% of firms will use this
tactic.
4. Focus on chronic conditions. A very small percentage of
employees (around 20%) account for 80% of employersf healthcare spending. So
preventing and managing chronic conditions (obesity, diabetes, etc.) must be a
top priority
Lesser-known opportunities
5. Review your life and disability plans. According to Gray,
this is a huge opportunity. Based on the current market, most employers should
be able to negotiate lower premiums for life and disability insurance. Those
savings can then be used to help cover medical spending.
6. Link disability data to your wellness strategy. When
employers use the info about disability claims and employee absences to design
their wellness programs, those wellness programs are more effective.
7. Use your data. Between medical and disability claims and
biometric data, employers have a wealth of info at their fingertips. Healthcare
providers should be able to format this data in a way that will be easier to
budget for your healthcare costs moving forward.
Based on gTop 10 Strategies to Keep Medical Trend Under
5%h by Marybeth Gray as presented at the Mid-Sized Retirement & Healthcare Plan Management
Conference in San Diego.
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